Registration No. 333- __________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
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UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 62-1147325
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8410 West Bryn Mawr, Suite 700
Chicago, Illinois 60631
(Address of Principal Executive Offices) (Zip Code)
United States Cellular Corporation
Key Management Restricted Stock Plan,
1997 Special Retention Restricted Stock Awards,
1998 Technical Associate Retention Program
and
1998 Long-Term Incentive Program
(Full title of the plan)
LeRoy T. Carlson, Jr.
Chairman
United States Cellular Corporation
8410 West Bryn Mawr, Suite 700
Chicago, Illinois 60631
(Name and address of agent for service)
(773) 399-8900
(Telephone number, including
area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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Title of
Securities Amount Proposed Maximum Proposed Maximum
to be to be Offering Price Aggregate Amount of
Registered Registered Per Share (1) Offering Price Registration Fee
- - --------------------------------------------------------------------------------
Common Shares 1,079,000 $29.28 $31,594,469 $9,320
shares
(2)
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(1) Estimated for the Common Shares solely for the purpose of calculating
the registration fee on the basis of the average of the high and low
prices of the Common Shares of the Company on the American Stock
Exchange on June 16, 1998.
(2) 25,000 Common Shares are registered under the 1996 Key Management
Restricted Stock Plan, 4,000 Common Shares are registered under the
1997 Special Retention Restricted Stock Awards, 100,000 Common Shares
are registered under the 1998 Technical Associate Retention Program and
950,000 Common Shares are registered under the 1998 Long-Term Incentive
Program. In addition, this Registration Statement also covers an
<PAGE>
indeterminate amount of additional securities which may be issued under
the above-referenced Plans pursuant to the anti-dilution provisions of
such Plans.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
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Item 2. Registrant Information and Employee Plan Annual Information*
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* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act") and the Note to Part I of Form S-8.
The registrant has previously filed a Registration Statement on Form
S-8 (No. 033-57255), relating to 750,000 Common Shares, which first became
effective on January 12, 1995, for issuance under the registrant's 1994
Long-Term Incentive Plan, which has been redesignated as the 1998 Long-Term
Incentive Program (the "Program"). Pursuant to Rule 429 under the Securities Act
of 1933, as amended, the Prospectus related to the Program includes the 750,000
Common Shares covered by Registration Statement No. 033-57255, as well as the
securities registered by this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
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The following documents which have heretofore been filed by United
States Cellular Corporation (the "Company" or the "Registrant"), with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference herein and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;
3. The description of the Common Shares, par value $1.00 per
share ("Common Shares"), of the Company contained in the
Company's Amendment No. 2 on Form 8, dated December 28, 1992,
to the Company's Report on Form 8-A; and
4. All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year ended
December 31, 1997.
All documents, subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and made a part hereof from their
respective dates of filing (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
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Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
-------------------------
See Item 3.
Item 5. Interests of Named Experts and Counsel.
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The legality of the Common Shares offered hereby is being passed upon
for the Company by Sidley & Austin, One First National Plaza, Chicago, Illinois
60603. The Company is controlled by Telephone and Data Systems, Inc. ("TDS") and
TDS is controlled by a voting trust. Walter C.D. Carlson, a trustee and
beneficiary of the voting trust and a director of TDS, the Company and certain
other subsidiaries of TDS, Michael G. Hron, the Secretary of TDS and certain
other subsidiaries of TDS, William S. DeCarlo, the Assistant Secretary of TDS
and certain subsidiaries of TDS, Stephen P. Fitzell, the Secretary of the
Company and certain other subsidiaries of TDS, and Sherry S. Treston, the
Assistant Secretary of the Company and certain other subsidiaries of TDS, are
partners of Sidley & Austin.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The Company's Restated Certificate of Incorporation contains a
provision providing that no director or officer of the Company shall be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director or officer except for breach of the
director's or officer's duty of loyalty to the Company or its stockholders, acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, unlawful payment of dividends, unlawful stock
redemptions or repurchases and transactions from which the director or officer
derived an improper personal benefit.
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article XI of the
Company's Restated Certificate of Incorporation, as amended, contains provisions
for the indemnification of directors, officers and employees of the Company
within the limitations permitted by Section 145.
The Company has directors' and officers' liability insurance which
provides, subject to certain policy limits, deductible amounts and exclusions,
coverage for all persons who have been, are or may in the future be, directors
or officers of the Company, against amounts which such persons must pay
resulting from claims against them by reason of their being such directors or
officers during the policy period for certain breaches of duty, omissions or
other acts done or wrongfully attempted or alleged.
Item 7. Exemption from Registration Claimed.
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Not Applicable.
Item 8. Exhibits.
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The exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index. The Plans is not intended to be qualified under
Section 401(a) of the Internal Revenue Code.
Item 9. Undertakings.
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The Company hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(a) To include any prospectus required by Section 10(a)
(3) of the Securities Act;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in
the information set forth in the Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high and of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and pricerepresent no more than a 20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(c) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
Provided, however, that paragraphs 1.(a) and 1.(b) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the Common Shares being registered hereby
which remain unsold at the termination of the offering.
4. That, for the purposes of determining any liability under the
Securities Act, each filing of the Company's Annual Report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering hereof.
5. That, insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling
person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, State of Illinois, on the 17th day of
June, 1998.
UNITED STATES CELLULAR CORPORATION
By: /s/ H. Donald Nelson
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H. Donald Nelson
President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities indicated and on the 17th day of June, 1998.
/s/ LeRoy T. Carlson, Jr. Chairman and Director
- - ----------------------------
LeRoy T. Carlson, Jr.
/s/ H. Donald Nelson President (Chief Executive
- - ---------------------------- Officer) and Director
H. Donald Nelson
/s/ LeRoy T. Carlson Director
- - ----------------------------
LeRoy T. Carlson
/s/ Murray L. Swanson Director
- - ----------------------------
Murray L. Swanson
/s/ Paul-Henri Denuit Director
- - ----------------------------
Paul-Henri Denuit
/s/ Walter C.D. Carlson Director
- - ----------------------------
Walter C.D. Carlson
/s/ Kenneth R. Meyers Senior Vice President - Finance
- - ---------------------------- and Treasurer (Chief Financial Officer)
Kenneth R. Meyers
/s/ Phillip A. Lorenzini Controller (Principal Accounting Officer)
- - ----------------------------
Phillip A. Lorenzini
SIGNATURE PAGE TO S-8
KEY MANAGEMENT RESTRICTED STOCK PLAN,
1997 SPECIAL RETENTION RESTRICTED STOCK AWARDS
1998 TECHNICAL ASSOCIATE RETENTION PROGRAM
AND 1998 LONG-TERM INCENTIVE PROGRAM
OF UNITED STATES CELLULAR CORPORATION
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EXHIBIT INDEX
The following documents are filed herewith or incorporated
herein by reference.
Exhibit
No. Description
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4.1 Restated Certificate of Incorporation, as amended, of the
Company (Incorporated herein by reference to Exhibit 2(a) to
Amendment No. 2 on Form 8 dated December 28, 1992 to the
Company's Report on Form 8-A).
4.2 Restated Bylaws, as amended, of the Company (Incorporated
herein by reference to Exhibit 3 to Form 10-Q for the quarter
ended September 30, 1997).
5 Opinion of Sidley & Austin.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Sidley & Austin (contained in Exhibit 5 hereto).
99.1 Key Management Restricted Stock Plan
99.2 Form of 1997 Special Retention Restricted Stock Award
99.3 1998 Technical Associate Retention Program
99.4 1998 Long-Term Incentive Plan
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EXHIBIT 5
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
June 17, 1998
United States Cellular Corporation
Suite 700
8410 West Bryn Mawr Avenue
Chicago, Illinois 60631
Re: United States Cellular Corporation
Registration Statement on Form S-8
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Gentlemen:
We are counsel to United States Cellular Corporation, a
Delaware corporation (the "Company"), and have represented the Company in
connection with the Registration Statement on Form S-8 (the "Registration
Statement") being filed by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the issuance of 1,079,000 Common Shares, par value $1.00 per
share ("Common Shares"), of the Company pursuant to the (a) Key Management
Restricted Stock Plan, (b) 1997 Special Retention Restricted Stock Awards, (c)
1998 Technical Associate Retention Program, and (d) 1998 Long-Term Incentive
Program of the Company (collectively, the "Plans").
In rendering this opinion, we have examined and relied upon a
copy of the Plans and the Registration Statement, including the Prospectus
related to each Plan. We have also examined and relied upon originals, or copies
of originals certified to our satisfaction, of such agreements, documents,
certificates and other statements of governmental officials and other
instruments, have examined such questions of law and have satisfied ourselves as
to such matters of fact as we have considered relevant and necessary as a basis
for this opinion. We have assumed the authenticity of all documents submitted to
us as originals, the genuineness of all signatures, the legal capacity of all
natural persons and the conformity with the original documents of any copies
thereof submitted to us for our examination.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated, validly existing
and in good standing under the General Corporation Law of the State of Delaware;
and
2. Each Common Share will be legally issued, fully paid and
nonassessable when: (i) the Registration Statement shall have become effective
under the Securities Act; (ii) such Common Share shall have been duly issued in
the manner contemplated by the applicable Plan; and (iii) a certificate
representing such Common Share shall have been duly executed, countersigned and
registered and duly delivered to the purchaser thereof against payment of the
agreed consideration therefor (but not less than the par value thereof) in
accordance with the terms of the applicable Plan.
<PAGE>
United States Cellular Corporation
June 17, 1998
Page 2
We do not find it necessary for the purposes of this opinion
to cover, and accordingly we express no opinion as to, the application of the
securities or "Blue Sky" laws of the various states to the issuance of the
Common Shares.
This opinion is limited to the Delaware General Corporation
Law and the Securities Act to the extent applicable.
The Company is controlled by Telephone and Data Systems, Inc.
("TDS") and TDS is controlled by a voting trust. Walter C.D. Carlson, a trustee
and beneficiary of the voting trust and a director of TDS, the Company and
certain other subsidiaries of TDS, Michael G. Hron, the Secretary of TDS and
certain other subsidiaries of TDS, William S. DeCarlo, the Assistant Secretary
of TDS and certain subsidiaries of TDS, Stephen P. Fitzell, the Secretary of the
Company and certain other subsidiaries of TDS, and Sherry S. Treston, the
Assistant Secretary of the Company and certain other subsidiaries of TDS, are
partners of this Firm.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to all references to our Firm in or made a
part of the Registration Statement.
Very truly yours,
SIDLEY & AUSTIN
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of United States Cellular
Corporation, of our report dated January 28, 1998 on the consolidated financial
statements and financial statement schedules of United States Cellular
Corporation and Subsidiaries, included or incorporated by reference in the
United States Cellular Corporation Form 10-K for the year ended December 31,
1997. We also consent to all references to our Firm included in this Form S-8
Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
June 17, 1998
<PAGE>
EXHIBIT 99.1
UNITED STATES CELLULAR CORPORATION
KEY MANAGEMENT RESTRICTED STOCK PLAN
ARTICLE I
PURPOSES
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The purposes of the Key Management Restricted Stock Plan (the
"Plan") of United States Cellular Corporation, a Delaware corporation (the
"Company"), are to align the interests of the Company's stockholders and certain
management employees who are critical to the Company's long-term success by
increasing the proprietary interest of such employees in the Company's growth
and success and to advance the interests of the Company by attracting and
retaining other qualified individuals with similar skills.
ARTICLE II
DEFINITIONS
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For purposes of the Plan, the following capitalized terms
shall have the meanings set forth in this Article.
2.1 "Affiliate" shall mean TDS or any other corporation which owns
directly or indirectly at least 50% of the outstanding stock of the Company or
the combined voting power of such outstanding stock or a corporation at least
50% of whose outstanding stock or the combined voting power of such outstanding
stock is owned directly or indirectly by TDS or by the Company.
2.2 "Agreement" shall mean a written agreement evidencing an award
hereunder between the Company and a recipient of an award.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Common Stock" shall mean the class of shares of the Company
designated as "Common Shares" in the Articles of Incorporation of the Company.
2.5 "Disability" shall mean a total physical disability which, in the
Committee's judgment, prevents an Eligible Employee from performing
substantially such Eligible Employee's employment duties and responsibilities
for a continuous period of at least six months.
2.6 "Eligible Employee" shall mean an individual who is an employee of
the Company or any Affiliate on the date a Restricted Stock Award is to be
granted and who was a Management Employee for at least one full month during the
Performance Year with respect to which the Restricted Stock Award is to be
granted.
2.7 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.8 "Fair Market Value" of a share of Stock subject to a Restricted
Stock Award shall mean the closing sale price of the share of Stock on the
principal national stock exchange on which the Stock is traded on July 1 (or the
first trading day thereafter if July 1 is not a trading day) of the year
following the Performance Year with respect to which the Restricted Stock Award
is granted; provided, however, that the Fair Market Value of a share of Stock
granted with respect to the 1995 Performance Year shall be determined on June 7,
1996.
2.9 "Management Employee" shall mean an employee of the Company who is
an Area General Manager, Market General Manager, Market Manager, Sales Manager,
Retail Sales Manager or Agent Manager.
2.10 "Performance Year" shall mean 1995, 1996 or 1997, as the context
requires.
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2.11 "Restricted Stock" shall mean shares of Stock that are subject to
a Restriction Period.
2.12 "Restricted Stock Award" shall mean an award of Restricted Stock
under the Plan.
2.13 "Restriction Period" shall mean the period designated by the
Committee during which the Restricted Stock subject to a Restricted Stock Award
may not be sold, transferred, assigned, pledged, hypothecated or otherwise
encumbered or disposed of, except as provided in the Plan or the Agreement
relating to such Restricted Stock Award.
2.14 "Stock" shall mean Common Stock and any other equity security
which (i) is designated by the Board to be available for awards under the Plan
or (ii) becomes available for awards under the Plan by reason of a conversion,
stock split, stock dividend, recapitalization, reclassification, reorganization,
merger, consolidation, combination, exchange of shares, spin-off or other
similar change in capitalization or event or any distribution to holders of
shares of Common Stock.
2.15 "Tax Date" shall have the meaning set forth in Section 5.6.
2.16 "TDS" shall mean Telephone and Data Systems, Inc., an Iowa
corporation.
ARTICLE III
ADMINISTRATION
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The Plan shall be administered by the President of Telephone
and Data Systems, Inc. (the "Committee"). Subject to the terms of the Plan and
the Schedule attached hereto, the Committee shall determine the number of shares
of Restricted Stock subject to each Restricted Stock Award. The Committee shall
interpret the Plan and establish rules and regulations for the administration of
the Plan and may impose, incidental to the grant of a Restricted Stock Award,
conditions with respect to the award, including conditions with respect to
competitive employment or other activities. All determinations, interpretations,
rules and regulations made by the Committee shall be conclusive and binding on
all parties.
The Committee may delegate some or all of its power and
authority hereunder to other officers of the Company as the Committee deems
appropriate.
No member of the Board or the Committee, and no officer to
whom the Committee delegates any of its power and authority hereunder, shall be
liable for any act, omission, interpretation, construction or determination made
in connection with the Plan in good faith, and the members of the Board and the
Committee and such other officers shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys' fees) arising therefrom to the full extent permitted by
law and under any directors' or officers' liability insurance that may be in
effect from time to time.
ARTICLE IV
RESTRICTED STOCK AWARDS
-----------------------
4.1 Selection of Eligible Employees for Awards and Number of
Shares Subject to Awards. (a) In General. As soon as practicable after the end
of each Performance Year, the Committee, with the assistance and recommendation
of the Senior Vice President of Operations and the Vice President of Human
Resources of the Company, shall assess the performance of the Eligible Employees
for such Performance Year and may grant a Restricted Stock Award to each such
Eligible Employee whose performance for such Performance Year was assessed by
the Committee as "MR," "ER" or "FE," as described in the Schedule attached
hereto; provided, however, that no more than 80% of the Eligible Employees may
be granted a Restricted Stock Award for any Performance Year. In the event that
the performances of over 80% of the Eligible Employees are assessed as MR, ER or
FE, the Committee, in its sole discretion, shall determine which of such
Eligible Employees shall be granted a Restricted Stock Award. The Restricted
Stock Award granted to each such Eligible Employee shall be with respect to that
number of whole shares of Stock with
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an aggregate Fair Market Value equal to a certain percentage of the Eligible
Employee's base salary on January 1 of the year immediately succeeding the
Performance Year, with such percentage based upon such Eligible Employee's
assessed level of performance during the Performance Year. The Schedule attached
hereto sets forth the applicable percentage of base salary for each performance
level for each Performance Year. If the percentage of an Eligible Employee's
base salary upon which his or her Restricted Stock Award is based would result
in any fractional share being subject to a Restricted Stock Award, the
number of shares subject to the award shall be rounded to the next highest
number of shares.
(b) Proration of Awards. If an Eligible Employee was a
Management Employee during only a portion of a Performance Year, the number of
shares of Restricted Stock subject to his or her award for such Performance Year
shall be determined by multiplying the number of shares of Restricted Stock
which would have been subject to his or her award if the Eligible Employee had
been a Management Employee for all of the Performance Year by a fraction, the
numerator of which is the number of calendar months of such Performance Year in
which such Eligible Employee was a Management Employee and the denominator of
which is twelve.
4.2 Terms of Restricted Stock Awards. (a) In General.
Restricted Stock Awards shall be subject to the following terms and conditions
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Committee shall deem advisable.
(b) Share Certificates. During the Restriction Period, a
certificate representing a Restricted Stock Award shall be registered in the
name of the Eligible Employee who was granted the award and shall bear a legend,
in addition to any legend which may be required pursuant to Section 5.7,
indicating that the ownership of the shares of Stock represented by such
certificate is subject to the restrictions, terms and conditions of the Plan and
the Agreement relating to the Restricted Stock Award. All such certificates
shall be deposited with the Company, together with stock powers or other
instruments of assignment, each endorsed in blank, which would permit transfer
to the Company of the shares of Stock subject to the Restricted Stock Award in
the event such award is forfeited. Subject to the Company's right to require
payment of any taxes in accordance with Section 5.6, the certificate evidencing
ownership of the requisite number of shares of Stock shall be delivered to the
Eligible Employee upon termination of the Restriction Period.
(c) Rights with Respect to Restricted Stock Awards. Unless
otherwise set forth in this Plan or determined by the Committee at the time a
Restricted Stock Award is granted, and subject to the terms and conditions of a
Restricted Stock Award, the holder of such an award shall have all rights as a
stockholder of the Company, including, but not limited to, voting rights, the
right to receive dividends and the right to participate in any capital
adjustment of the Company; provided, however, that any dividend or other
distribution with respect to shares of Common Stock subject to a Restriction
Period shall be deposited with the Company and shall be subject to the same
restrictions as the shares of Stock with respect to which such dividend or other
distribution was made, unless the Restricted Stock Award provides otherwise.
(d) Termination of Restriction Period. Except as otherwise
provided in this Section 4.2, the termination of the Restriction Period with
respect to a Restricted Stock Award shall occur on the earliest of: (i) July 1,
1998 for those Restricted Stock Awards granted in 1996 and July 1, 1999 for
those Restricted Stock Awards granted in 1997 and 1998, and (ii) the date the
Eligible Employee who was granted such award terminates employment with the
Company or an Affiliate.
(e) Cancellation of Award Upon Certain Terminations of
Employment. Notwithstanding Section 4.2(d), if an Eligible Employee's employment
terminates for reasons other than Disability, retirement on or after age 65 or
death, the Restricted Stock Award shall be forfeited and canceled by the
Company.
(f) Forfeiture of Award Upon Competition with Company or Any
Affiliate or Misappropriation of Confidential Information. Notwithstanding any
other provision in the Plan, any Restricted Stock subject to a Restricted Stock
Award and granted to an Eligible Employee hereunder shall be immediately
forfeited on or after any date on which such Eligible Employee (i) enters into
competition with the Company or an Affiliate, or (ii) misappropriates
confidential information of the Company or an Affiliate, as determined by the
Committee in its sole discretion.
For purposes of the preceding sentence, an Eligible Employee
shall be treated as entering into competition with the Company or an Affiliate
if such Eligible Employee (i) directly or indirectly, individually or in
conjunction with any person, firm or corporation, has contact with any customer
of the Company or an Affiliate or any prospective customer which has been
contacted or solicited by or on behalf of the Company or an Affiliate for the
purpose of soliciting or selling to such customer or prospective customer any
product or service, except to the extent such contact is made on behalf of the
Company
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or an Affiliate, or (ii) otherwise competes with the Company or an Affiliate in
any manner or otherwise engages in the business of the Company or an Affiliate.
An Eligible Employee shall be treated as misappropriating
confidential information of the Company or an Affiliate if such Eligible
Employee (i) uses confidential information (as described below) for the benefit
of anyone other than the Company or such Affiliate, as the case may be, or
discloses the confidential information to anyone not authorized by the Company
or such Affiliate, as the case may be, to receive such information, (ii) upon
termination of employment, makes any summaries of, takes any notes with respect
to, or memorizes any information or takes any confidential information or
reproductions thereof from the facilities of the Company or an Affiliate, or
(iii) upon termination of employment or upon the request of the Company or an
Affiliate, fails to return all confidential information then in the Eligible
Employee's possession. "Confidential information" shall mean any confidential
and proprietary drawings, reports, sales and training manuals, customer lists,
computer programs, and other material embodying trade secrets or confidential
technical, business, or financial information of the Company or an Affiliate.
(g) Change in Control. Notwithstanding any other provision in
the Plan, the Restriction Period shall terminate immediately upon either (i) a
"Change in Control," as defined below, or (ii) a "change in control" within the
meaning of the Telephone and Data Systems, Inc. 1994 Long-Term Incentive Plan at
a time when TDS owns directly or indirectly at least 50% of either the
outstanding stock of the Company or the combined voting power of such stock. For
purposes of this Section 4.2(g), a "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
25% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally on matters
(without regard to the election of directors) (the "Outstanding Voting
Securities"), excluding, however, the following: (i) any acquisition
directly from the Company or an Affiliate (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege, unless the security being so exercised, converted or
exchanged was acquired directly from the Company or an Affiliate, (ii)
any acquisition by the Company or an Affiliate, (iii) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate, (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this Section 4.2(g), or (v) any acquisition
by the following persons: (A) LeRoy T. Carlson or his spouse, (B) any
child of LeRoy T. Carlson or the spouse of any such child, (C) any
grandchild of LeRoy T. Carlson, including any child adopted by any
child of LeRoy T. Carlson, or the spouse of any such grandchild, (D)
the estate of any of the persons described in clauses (A)-(C), (E) any
trust or similar arrangement (including any acquisition on behalf of
such trust or similar arrangement by the trustees or similar persons)
provided that all of the current beneficiaries of such trust or similar
arrangement are persons described in clauses (A)-(C) or their lineal
descendants, or (F) the voting trust which expires on June 30, 2009, or
any successor to such voting trust, including the trustees of such
voting trust on behalf of such voting trust (all such persons,
collectively, the "Exempted Persons");
(2) individuals who, as of June 7, 1996, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided that any individual who becomes a
director of the Company subsequent to June 7, 1996, and whose election
or nomination for election by the Company's stockholders was approved
by the vote of at least a majority of the directors then comprising the
Incumbent Board, shall be deemed a member of the Incumbent Board; and
provided further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other
than the Board shall not be deemed a member of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Transaction"), excluding, however, a Corporate Transaction pursuant to
which (i) all or substantially all of the individuals or entities who
are the beneficial owners of the Outstanding Voting Securities
immediately prior to such Corporate Transaction
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<PAGE>
will beneficially own, directly or indirectly, more than 51% of the
combined voting power of the outstanding securities of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns,
either directly or indirectly, the Company or all or substantially all
of the Company's assets) which are entitled to vote generally on
matters (without regard to the election of directors), in substantially
the same proportions relative to each other as the shares of
Outstanding Voting Securities are owned immediately prior to such
Corporate Transaction, (ii) no Person (other than the following
Persons: (v) the Company or an Affiliate, (w) any employee benefit plan
(or related trust) sponsored or maintained by the Company or an
Affiliate, (x) the corporation resulting from such Corporate
Transaction, (y) the Exempted Persons, and (z) any Person which
beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 25% or more of the Outstanding Voting
Securities) will beneficially own, directly or indirectly, 25% or more
of the combined voting power of the outstanding securities of such
corporation entitled to vote generally on matters (without regard to
the election of directors) and (iii) individuals who were members of
the Incumbent Board will constitute at least a majority of the members
of the board of directors of the corporation resulting from such
Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
ARTICLE V
GENERAL PROVISIONS
------------------
5.1 Effective Date and Term of Plan. The Plan shall be
effective as of June 7, 1996. The Plan shall terminate in 1998 after the
Restricted Stock Awards for the 1997 Performance Year have been determined and
granted, unless the Plan is terminated earlier by the Board. Termination of the
Plan shall not affect the terms or conditions of any Restricted Stock Award
granted prior to the Plan's termination.
5.2 Shares Available. Subject to adjustment as provided in
Section 5.8 of the Plan, 25,000 shares of Common Stock initially shall be
available under the Plan, and at any other time the number of shares available
under the Plan shall be such number, reduced by the sum of the aggregate number
of shares of Common Stock which are issued pursuant to outstanding Restricted
Stock Awards. To the extent that a Restricted Stock Award is forfeited, the
shares of Stock subject to such forfeited award shall again be available under
the Plan. Shares of Stock to be delivered under the Plan shall be made available
from authorized and unissued shares of Stock, or authorized and issued shares of
Stock reacquired and held as treasury shares or otherwise or a combination
thereof.
5.3 Amendments. The Board may amend the Plan as it shall deem
advisable. No amendment may impair the rights of a holder of an outstanding
Restricted Stock Award without the consent of such holder.
5.4 Agreement. Each award under the Plan shall be evidenced by
an Agreement setting forth the terms and conditions applicable to such award. No
award shall be valid until an Agreement is executed by the Company and the
recipient of such award. Upon execution by each party and delivery of the
Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.
5.5 Non-Transferability. No share of Restricted Stock subject
to a Restricted Stock Award may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process. Upon
any attempt by an Eligible Employee granted a Restricted Stock Award to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
share of Restricted Stock, the Restricted Stock Award and all rights thereunder
shall immediately become null and void.
5.6 Tax Withholding. The Company shall have the right to
require, prior to the issuance or delivery of any shares of Stock or the payment
of any cash pursuant to a Restricted Stock Award made hereunder, payment by the
holder of such award of any federal, state, local or other taxes which may be
required to be withheld or paid in connection with such award ("Required Tax
Payments"). As determined by the Committee at the time an award is granted, an
Agreement may provide that (i) the Company shall withhold whole shares of Stock
which would otherwise be delivered to a holder, having
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<PAGE>
an aggregate fair market value determined as of the date the obligation to
withhold or pay taxes arises in connection with an award (the "Tax Date") equal
to the Required Tax Payments, or shall withhold an amount of cash which would
otherwise be payable to a holder, in the amount necessary to make the Required
Tax Payments, or (ii) the holder may satisfy his or her obligation to pay an
amount equal to the Required Tax Payments in any of the following forms: (A) a
cash payment to the Company, (B) delivery to the Company of previously owned
whole shares of Stock for which the holder has good title, free and clear of all
liens and encumbrances, (C) authorization to the Company to withhold whole
shares of Stock which would otherwise be delivered or to withhold an amount of
cash which would otherwise be payable to a holder, provided that the fair market
value of shares of Stock withheld or the amount of cash withheld is equal to the
Required Tax Payments, (D) a cash payment by a broker-dealer acceptable to the
Company through whom the Eligible Employee has sold the shares of Stock with
respect to which the Required Tax Payments have arisen, or (E) any combination
of (A), (B) and (C); further provided, however, that the Company shall have sole
discretion to disapprove of an election pursuant to any of clauses (B)(E). An
Agreement may provide for shares of Stock to be delivered or withheld having an
aggregate fair market value in excess of the minimum amount required to be
withheld. Any fraction of a share of Stock which would be required to satisfy
such an obligation shall be disregarded and the remaining amount due shall be
paid in cash by the holder.
5.7 Restrictions on Shares. Each Restricted Stock Award made
hereunder shall be subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the shares of
Stock subject to such award upon any securities exchange or under any law, the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the delivery
of shares thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Stock delivered
pursuant to any Restricted Stock Award made hereunder bear a legend indicating
that the sale, transfer or other disposition thereof by the holder is prohibited
except in compliance with the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
5.8 Adjustment. In the event of any conversion, stock split,
stock dividend, recapitalization, reclassification, reorganization, merger,
consolidation, spin-off, combination of shares in a reverse stock split or other
similar event, the number and class of securities available under the Plan, and
the number and class of securities subject to each outstanding Restricted Stock
Award, shall be appropriately adjusted by the Committee. If any other event
shall occur which in the judgment of the Board would warrant an adjustment to
the number and class of securities available under the Plan, or the number and
class of securities subject to each outstanding Restricted Stock Award, then
such adjustment shall be authorized by the Board and made by the Committee upon
such terms and conditions as the Committee may deem equitable and appropriate.
To the extent that any adjustment under this Section 5.8 entitles an Eligible
Employee to receive any additional shares of Stock or other securities, the
shares of Stock available under the Plan shall be deemed to include such
additional shares of Stock or other securities. If any such adjustment would
result in a fractional security being available under the Plan, such fractional
security shall be disregarded. If any such adjustment would result in a
fractional security being subject to an outstanding Restricted Stock Award, the
Company shall pay the holder of such award, in connection with the vesting of
such award, an amount in cash determined by multiplying (i) the fraction of such
security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A)
the Fair Market Value on the vesting date over (B) the purchase price, if any,
of such security. Any determination made by the Committee under this Section 5.8
shall be final, binding and conclusive on all holders of Restricted Stock Awards
granted under the Plan.
5.9 No Right of Participation or Employment. No person shall
have any right to participate in the Plan. Neither the Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company or any Affiliate or affect in any manner the right of the Company or any
Affiliate to terminate the employment of any person at any time without
liability hereunder.
5.10 Rights as Stockholder. No person shall have any right as
a stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.
5.11 Governing Law. The Plan, each award hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States,
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<PAGE>
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.
5.12 Severability. If a provision of the Plan shall be held
illegal or invalid, the illegality shall not affect the remaining parts of the
Plan and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included in the Plan.
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<PAGE>
SCHEDULE
--------
================================================================================
Performance Levels and Salary Percentages
===========================================================
Performance
Year FM PM MR ER FE
================================================================================
1995 0% 0% 15%-22% 22.5%-29% 30%
1996 0% 0% 15%-22% 22.5%-29% 30%
1997 0% 0% 15%-22% 22.5%-29% 30%
- - --------------------------------------------------------------------------------
3 Year Total 0% 0% 45%-66% 67.5%-87% 90%
================================================================================
Description of Performance Levels
- - ---------------------------------
FE Far exceeds job requirements. Superior results on a sustained basis.
- - -- Rarely equaled.
ER Exceeds job requirements on a consistent basis. Makes contributions
- - -- beyond job demands.
MR Meets job requirements in a fully satisfactory manner.
- - --
PM Partially meets job requirements and needs to improve. Action plan
- - -- should be established for improvement.
FM Fails to meet job requirements. Problem areas must be monitored and
- - -- documented.
<PAGE>
EXHIBIT 99.2
------------
UNITED STATES CELLULAR CORPORATION
SPECIAL RETENTION RESTRICTED STOCK AWARD AGREEMENT
United States Cellular Corporation, a Delaware corporation
(the "Company"), hereby grants to (the "Employee") as of February 28, 1997
(the "Grant Date") a restricted stock award of shares of the Company's
Common Stock (the "Award"), upon and subject to the restrictions, terms and
conditions set forth below.
1. Stock Certificates.
------------------
A stock certificate or certificates representing the total
number of shares of Common Stock subject to the Award (as may be adjusted
pursuant to Section 5.3(b)) shall be delivered to the Employee as soon as
administratively practicable after the lapse of the restrictions set forth in
Section 4.
2. Custody and Delivery of Shares.
------------------------------
As soon as administratively practicable after receipt of this
Agreement, the Employee shall execute the Agreement in duplicate by affixing his
signature to the end hereof and returning one of the signed Agreements to the
Company's Vice President of Human Resources. The Agreement shall not be deemed
executed unless the Employee (i) executes one or more irrevocable stock powers
to facilitate the transfer to the Company (or its assignee or nominee) all or a
portion of the shares subject to the Award if shares are forfeited either
pursuant to Paragraph 4 hereof or if required under applicable laws or
regulations, and (ii) returns such stock power or powers to the Company's Vice
President of Human Resources at the same time the signed Agreement is returned
to the Company's Vice President of Human Resources. The Company shall hold the
certificate or certificates representing the shares of Common Stock subject to
the Award (the "Award Shares") until the restrictions on such shares have
terminated and the Company shall thereupon, subject to Paragraph 5.3, deliver
the certificate or certificates for such shares to the Employee. The Company
shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery, except as otherwise provided in Paragraph 5.3.
3. Rights as a Stockholder.
-----------------------
The Employee shall have the right to vote the Award Shares
(and Common Stock distributions thereon), unless and until such shares are
forfeited pursuant to Paragraph 4 hereof or if required under applicable laws or
regulations. Any dividends or other distributions (including, without
limitation, a cash dividend, a stock dividend or stock split) with respect to
Award Shares shall be delivered to the Company and shall be subject to the same
restrictions as the Award Shares. If any dividend or other distribution is in
the form of Common Stock, the Employee shall execute one or more irrevocable
stock powers similar to the stock powers executed with respect to the Award
Shares and return such stock power and powers to the Company's Vice President of
Human Resources. Such dividends and other distributions made with respect to
Award Shares shall be accumulated in a separate account for the Employee. As
soon as practicable after any Award Shares are no longer subject to forfeiture,
(i) any cash dividends held in such separate account in respect of such shares
shall be paid to the Employee in cash without interest and (ii) any other
distributions made in respect of such shares shall be delivered to the Employee
in kind without interest.
4. Restriction Period and Forfeiture.
---------------------------------
(a) In General. Except as otherwise provided in this
Paragraph 4, the restrictions on 50% of the Award Shares shall terminate on
January 15, 1999 if on such date the Employee is employed by any of the
following: (i) the Company; (ii) any corporation which owns directly or
indirectly at least 50% of the outstanding stock of the Company (or the combined
voting power of such outstanding stock); or (iii) a corporation at least 50% of
whose outstanding stock or the combined voting power of such outstanding
stock is owned directly or indirectly by the Company (any corporation
described in clause (ii) or (iii) shall be an "Affiliate") and the restrictions
on the other 50% of the Award Shares shall terminate on January 15, 2000 if on
such date the Employee is employed by the Company or an Affiliate.
<PAGE>
(b) Retirement, Disability or Death. If the Employee's
employment by the Company or an Affiliate terminates by reason of (i) retirement
on or after age 65, (ii) a total physical disability which, in the judgment of
the Chairman, prevents the Employee from performing such Employee's employment
duties for a continuous period of at least six months ("Disability") or (iii)
death prior to termination of restrictions on all the Award Shares in accordance
with subsection (a) above, the restrictions shall terminate upon the Employee's
termination of employment.
(c) Other Termination of Employment. If the Employee's
employment by the Company or an Affiliate terminates for any reason other than
retirement on or after age 65, Disability or death prior to termination of
restrictions on all the Award Shares in accordance with subsection (a) above,
the Award Shares subject to the restrictions on the date of the Employee's
termination of employment shall be forfeited, and in the event that the Employee
shall forfeit any Award Shares, the Employee shall, within 10 days of the date
of the Company's written request, return his signed copy of this Agreement to
the Company for cancellation. Notwithstanding the prior sentence, such shares
nonetheless shall be forfeited and canceled by the Company.
(d) Competition or Misappropriation of Confidential
Information. If prior to the delivery of the certificates representing the Award
Shares in accordance with Paragraph 2 above, the Employee either (i) enters into
competition with the Company or an Affiliate or (ii) misappropriates
confidential information of the Company or an Affiliate, as determined by the
Chairman in his sole discretion, then all rights with respect to the Award
Shares shall be immediately forfeited and shall be canceled by the Company. For
purposes of the preceding sentence, the Employee shall be treated as entering
into competition with the Company or an Affiliate if the Employee (i) directly
or indirectly, individually or in conjunction with any person, firm or
corporation, has contact with any customer of the Company or an Affiliate or any
prospective customer which has been contacted or solicited by or on behalf of
the Company or an Affiliate for the purpose of soliciting or selling to such
customer or prospective customer any product or service, except to the extent
such contact is made on behalf of the Company or an Affiliate, or (ii) otherwise
competes with the Company or an Affiliate in any manner or otherwise engages in
the business of the Company or an Affiliate. The Employee shall be treated as
misappropriating confidential information of the Company or an Affiliate if the
Employee (i) uses confidential information (as described below) for the benefit
of anyone other than the Company or such Affiliate, as the case may be, or
discloses the confidential information to anyone not authorized by the Company
or such Affiliate, as the case may be, to receive such information, (ii) upon
termination of employment, makes any summaries of, takes any notes with respect
to, or memorizes any information or takes any confidential information or
reproductions thereof from the facilities of the Company or an Affiliate, or
(iii) upon termination of employment or upon the request of the Company or an
Affiliate, fails to return all confidential information then in the Employee's
possession. "Confidential information" shall mean any confidential and
proprietary drawings, reports, sales and training manuals, customer lists,
computer programs, and other material embodying trade secrets or confidential
technical, business, or financial information of the Company or an Affiliate.
(e) Change in Control. Any restrictions on Award Shares shall
immediately terminate upon the occurrence of (i) a "Change in Control," as
defined below, or (ii) a "change in control" within the meaning of the Telephone
and Data Systems, Inc. 1994 Long-Term Incentive Plan at a time when TDS owns
directly or indirectly at least 50% of either the outstanding stock of the
Company or the combined voting power of such stock.
For purposes of this Paragraph 4(e), a Change in Control shall
mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
25% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally on matters
(without regard to the election of directors) (the "Outstanding Voting
Securities"), excluding, however, the following: (i) any acquisition
directly from the Company or an Affiliate (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege, unless the security being so exercised, converted or
exchanged was acquired directly from the Company or an Affiliate), (ii)
any acquisition by the Company or an Affiliate, (iii) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate, (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this Paragraph 4(e), or (v) any acquisition
by the following persons: (A) LeRoy T. Carlson or his spouse, (B) any
child of LeRoy T.
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<PAGE>
Carlson or the spouse of any such child, (C) any grandchild of LeRoy T.
Carlson, including any child adopted by any child of LeRoy T. Carlson,
or the spouse of any such grandchild, (D) the estate of any of the
persons described in clauses (A)-(C), (E) any trust or similar
arrangement (including any acquisition on behalf of such trust or
similar arrangement by the trustees or similar persons) provided that
all of the current beneficiaries of such trust or similar arrangement
are persons described in clauses (A)-(C) or their lineal descendants,
or (F) the voting trust which expires on June 30, 2009, or any
successor to such voting trust, including the trustees of such voting
trust on behalf of such voting trust, (all such persons, collectively,
the "Exempted Persons");
(2) individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Incumbent Board;
provided that any individual who becomes a director of the Company
after such date, whose election, or nomination for election by the
Company's stockholders, was approved by the vote of at least a majority
of the directors then comprising the Incumbent Board shall be deemed a
member of the Incumbent Board; and provided further, that any
individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall not
be deemed a member of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Transaction"), excluding, however, a Corporate Transaction pursuant to
which (i) all or substantially all of the individuals or entities who
are the beneficial owners of the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 51% of the combined voting power of
the outstanding securities of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns, either directly or
indirectly, the Company or all or substantially all of the Company's
assets) which are entitled to vote generally on matters (without regard
to the election of directors), in substantially the same proportions
relative to each other as the shares of Outstanding Voting Securities
are owned immediately prior to such Corporate Transaction, (ii) no
Person (other than the following Persons: (v) the Company or an
Affiliate, (w) any employee benefit plan (or related trust) sponsored
or maintained by the Company or Affiliate, (x) the corporation
resulting from such Corporate Transaction, (y) the Exempted Persons,
(z) and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Voting Securities) will beneficially own, directly or
indirectly, 25% or more of the combined voting power of the outstanding
securities of such corporation entitled to vote generally on matters
(without regard to the election of directors) and (iii) individuals who
were members of the Incumbent Board will constitute at least a majority
of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of th Company.
5. Additional Terms and Conditions of the Award.
--------------------------------------------
5.1. Nontransferability of Award. During the restriction
period described in Section 4(a), the shares of Common Stock subject to such
restrictions may not be transferred by the Employee other than by will, the laws
of descent and distribution or to the Employee's beneficiary or beneficiaries as
designated on the form attached hereto. Except as permitted by the foregoing,
during the restriction period described in Section 4(a), the shares of Common
Stock subject to such restrictions may not be sold, transferred, assigned,
pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process.
Any such attempted sale, transfer, assignment, pledge, hypothecation or
encumbrance, or other disposition of such shares shall be null and void.
5.2. Investment Representation. The Employee hereby
represents and covenants that (a) any share of Common Stock acquired upon the
vesting of the Award will be acquired for investment and not with a view to the
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<PAGE>
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), unless such acquisition has been registered
under the Securities Act and any applicable state securities law; (b) any
subsequent sale of any such shares shall be made either pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws, or pursuant to an exemption from registration under the
Securities Act and such state securities laws; and (c) if requested by the
Company, the Employee shall submit a written statement, in form satisfactory to
the Company, to the effect that such representation (x) is true and correct as
of the date of acquisition of any shares hereunder or (y) is true and correct as
of the date of any sale of any such shares, as applicable. As a further
condition precedent to the delivery to the Employee of any shares granted
pursuant to the Award, the Employee shall comply with all regulations and
requirements of any regulatory authority having control of or supervision over
the issuance of the shares and, in connection therewith, shall execute any
documents which the Board of Directors of the Company or any committee
authorized by the Board of Directors of the Company shall in its sole discretion
deem necessary or advisable.
5.3. Tax Withholding. (a) As a condition precedent to any
delivery to the Employee of any shares of Common Stock granted pursuant to the
Award, the Employee shall, upon request by the Company, pay to the Company such
amount of cash as the Company may be required, under all applicable federal,
state, local or other laws or regulations, to withhold and pay over as income or
other withholding taxes (the "Required Tax Payments") with respect to such
shares. If the Employee shall fail to advance the Required Tax Payments after
request by the Company, the Company may, in its discretion, deduct any Required
Tax Payments from any amount then or thereafter payable by the Company to the
Employee.
(b) The Employee may elect to satisfy his or her obligation to
advance the Required Tax Payments by any of the following means: (1) a cash
payment to the Company pursuant to Paragraph 5.3(a), (2) delivery to the Company
of previously owned whole shares of Common Stock (for which the Employee has
good title, free and clear of all liens and encumbrances) having a fair market
value determined as of the date the obligation to withhold or pay taxes first
arises in connection with the Award (the "Tax Date") which is equal to the
Required Tax Payments, (3) authorizing the Company to withhold from the shares
of Common Stock which would otherwise be delivered to the Employee pursuant to
the Award a number of whole shares of Common Stock having a fair market value
determined as of the Tax Date which is equal to the Required Tax Payments, (4) a
cash payment by a broker-dealer acceptable to the Company through whom the
Employee has sold the shares with respect to which the Required Tax Payments
have arisen or (5) any combination of (1), (2) and (3). The Company shall have
sole discretion to disapprove of an election pursuant to any of clauses (2)-(5).
Whole shares of Common Stock to be so delivered or withheld may not have an
aggregate fair market value in excess of the minimum amount of the Required Tax
Payments. Any fraction of a share of Common Stock which would be required to pay
the Required Tax Payments in full shall be disregarded and the remaining amount
due shall be paid in cash by the Employee.
5.4. Adjustment. In the event of any stock split, stock
dividend, recapitalization, reclassification, reorganization, merger,
consolidation, spin-off, combination of shares in a reverse stock split or other
similar event, the number and class of shares of Common Stock subject to any
restrictions at the time of such event shall be appropriately adjusted by the
Company. The decision of the Company regarding the amount and timing of any
adjustment pursuant to this Paragraph 5.4 shall be final, binding and
conclusive.
5.5. Compliance with Applicable Law. The Award is subject to
the condition that if the listing, registration or qualification of the shares
of Common Stock subject to the Award upon any securities exchange or under any
law, or the consent or approval of any governmental body, or the taking of any
other action is necessary or desirable as a condition of, or in connection with,
the termination of the restrictions on such shares or delivery of such shares,
then such shares may not be delivered, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained, free of any conditions not acceptable to the Company. The Company
agrees to make every reasonable effort to effect or obtain any such listing,
registration, qualification, consent or approval.
5.6. The Award Confer No Rights to Continued Employment. In no
event shall the granting of the Award or its acceptance by the Employee give or
be deemed to give the Employee any right to continued employment by the Company
or by any Affiliate.
-4-
<PAGE>
5.7. Decisions of Chairman. The Chairman shall have the right
to resolve all questions which may arise in connection with this Agreement. Any
interpretation, determination or other action made or taken by the Chairman
regarding this Agreement shall be final, binding and conclusive.
6. Miscellaneous Provisions.
6.1. Successors. This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Employee, acquire any rights
hereunder.
6.2. Notices. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by actual
delivery to the party entitled thereto, or (b) by mailing through the United
States postal service to the last known address of the party entitled thereto,
via certified or registered mail, postage prepaid and return receipt requested
or by telecopy with confirmation of receipt. The notice shall be deemed to be
received in case of delivery, on the date of its actual receipt by the party
entitled thereto, and in case of mailing by certified or registered mail, five
days following the date of such mailing, and in the case of telecopy, on the
date of confirmation of receipt.
6.3. Governing Law. This Agreement and all determinations made
and actions taken pursuant thereto, to the extent not governed by the laws of
the United States, shall be governed by, and interpreted in accordance with, the
internal laws of the State of Delaware, without regard to conflicts of laws
principles.
6.4. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.
UNITED STATES CELLULAR CORPORATION
By:_______________________________
H. Donald Nelson
Chief Executive Officer
__________________________________
Employee
-5-
<PAGE>
UNITED STATES CELLULAR CORPORATION
SPECIAL RETENTION RESTRICTED STOCK AWARD AGREEMENT
BENEFICIARY DESIGNATION FORM
----------------------------
You may designate a primary beneficiary and a secondary
beneficiary. You can name more than one person as a primary or secondary
beneficiary. For example, you may wish to name your spouse as primary
beneficiary and your children as secondary beneficiaries. Your secondary
beneficiary(ies) will receive nothing if any of your primary beneficiaries
survive you. All primary beneficiaries will share equally unless you indicate
otherwise. The same rule applies for secondary beneficiaries.
Designate Your Beneficiary(ies):
Primary Beneficiary(ies) (give name, address and relationship
to you):
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
Secondary Beneficiary(ies) (give name, address and
relationship to you): _____________________________
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
I certify that my designation of beneficiary set forth above
is my free act and deed.
------------------------------ ---------------------------
Name Signature
(please print)
---------------------------
Date
<PAGE>
EXHIBIT 99.3
UNITED STATES CELLULAR CORPORATION
1998 TECHNICAL ASSOCIATE RETENTION PROGRAM
ARTICLE I
PURPOSES
--------
The purposes of the 1998 Technical Associate Retention Program
(the "Program") of United States Cellular Corporation, a Delaware corporation
(the "Company"), are to align the interests of the Company's stockholders and
its employees with technological skills which are critical to the Company's
long-term success by increasing the proprietary interest of such employees in
the Company's growth and success and to advance the interests of the Company by
attracting and retaining other qualified individuals with similar skills.
ARTICLE II
DEFINITIONS
-----------
For purposes of the Program, the following capitalized terms
shall have the meanings set forth in this Article.
2.1 "Affiliate" shall mean TDS or any other corporation which
owns directly or indirectly at least 50% of the outstanding stock of the Company
or the combined voting power of such outstanding stock or a corporation at least
50% of whose outstanding stock or the combined voting power of such outstanding
stock is owned directly or indirectly by TDS or by the Company.
2.2 "Board" shall mean the Board of Directors of the Company.
2.3 "Common Stock" shall mean the class of shares designated
as "Common Shares" in the Articles of Incorporation of the Company.
2.4 "Disability" shall mean a total physical disability which,
in the Committee's judgment, prevents an Eligible Employee from performing
substantially such Eligible Employee's employment duties and responsibilities
for a continuous period of at least six months.
2.5 "Eligible Employee" shall mean an individual who (i) is an
employee of the Company or any Affiliate on the date a Restricted Stock Award is
to be granted, (ii) is not participating in any other bonus plan, (iii) was a
Technical Employee for at least one full quarter during the Performance Year
with respect to which the Restricted Stock Award is to be granted and (iv) is
selected by the Committee, in its sole discretion, to participate in the
Program.
2.6 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
2.7 "Fair Market Value" of a share of Stock subject to a
Restricted Stock Award shall mean the closing sale price of the share of Stock
on the principal national stock exchange on which the Stock is traded on its
first trading day in March of the year following the Performance Year with
respect to which the Restricted Stock Award is granted.
2.8 "Performance Year" shall mean 1998, 1999 and 2000, as the
context requires.
2.9 "Restricted Stock" shall mean shares of Stock that are
subject to a Restriction Period.
2.10 "Restricted Stock Award" shall mean an award of
Restricted Stock under the Program.
2.11 "Restriction Period" shall mean the period designated by
the Committee during which the Restricted Stock subject to a Restricted Stock
Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise
encumbered or disposed of, except as provided in the Program.
-7-
<PAGE>
2.12 "Stock" shall mean Common Stock and any other equity
security which (i) is designated by the Board to be available for awards under
the Program or (ii) becomes available for awards under the Program by reason of
a conversion, stock split, stock dividend, recapitalization, reclassification,
reorganization, merger, consolidation, combination, exchange of shares, spin-off
or other similar change in capitalization or event or any distribution to
holders of shares of Common Stock.
2.13 "Tax Date" shall have the meaning set forth in Section
5.5.
2.14 "TDS" shall mean Telephone and Data Systems, Inc., an
Iowa corporation.
2.15 "Technical Employee" shall mean an employee performing
technical services in the Engineering, Network Planning, Network Services and
Network Operations divisions of the Company.
ARTICLE III
ADMINISTRATION
--------------
The Program shall be administered by the Senior Vice President
of Engineering and Vice President of Human Resources of the Company (the
"Committee"). Subject to the terms of the Program and the Schedule attached
hereto, the Committee shall determine the number of shares of Restricted Stock
subject to each Restricted Stock Award. The Committee shall interpret the
Program and establish rules and regulations for the administration of the
Program and may impose, incidental to the grant of a Restricted Stock Award,
conditions with respect to the award, including conditions with respect to
competitive employment or other activities. All determinations, interpretations,
rules and regulations made by the Committee shall be subject to the approval of
the President of the Company and to the further approval of the President of
TDS, and after such approvals, shall be conclusive and binding on all parties.
The Committee may delegate some or all of its power and
authority hereunder to other officers of the Company as the Committee deems
appropriate.
No member of the Board or Committee, and none of the President
of the Company, the President of TDS nor any officer to whom the Committee
delegates any of its power and authority hereunder, shall be liable for any act,
omission, interpretation, construction or determination made in connection with
the Program in good faith, and the members of the Board and Committee and such
Presidents and other officers shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys' fees) arising therefrom to the full extent permitted by
law and under any directors' or officers' liability insurance that may be in
effect from time to time.
ARTICLE IV
RESTRICTED STOCK AWARDS
-----------------------
4.1 Selection of Eligible Employees for Awards and Number of
Shares Subject to Awards. (a) In General. As soon as practicable after the end
of each Performance Year, the Director of Engineering, the Director of Network
Planning, the Director of Network Services and the Directors of Network
Operations of the Company shall assess the performance of the Eligible Employees
for such Performance Year and shall recommend to the Committee the grant of a
Restricted Stock Award to each such Eligible Employee whose performance for such
Performance Year was assessed by such Directors as outstanding, commendable or
fully competent, as described in the Schedule attached hereto. After the review
of and any modification to the recommended awards which are made by the
Committee, the Committee shall submit for approval to the President of the
Company and the President of TDS the Restricted Stock Awards to be granted to
such Eligible Employees. The Restricted Stock Award granted to each such
Eligible Employee shall be with respect to that number of whole shares of Stock
with an aggregate Fair Market Value equal to a certain percentage of the
Eligible Employee's base salary on the July 1 of such Performance Year, with
such percentage based upon such Eligible Employee's assessed level of
performance during the Performance Year. The Schedule attached hereto sets forth
the applicable percentage of base salary for each performance level for each
Performance Year. If the percentage of an Eligible Employee's base salary would
otherwise result in any fractional share being subject to a Restricted Stock
Award, the number of shares subject to the award shall be rounded to the next
highest whole number of shares.
(b) Proration of Awards. If an Eligible Employee was a
Technical Employee during only a portion of a Performance Year, the number of
shares of Restricted Stock subject to his or her award for such Performance Year
shall
-8-
<PAGE>
be determined by multiplying the number of shares of Restricted Stock which
would have been subject to his or her award if the Eligible Employee had been a
Technical Employee for all of the Performance Year by a fraction, the numerator
of which is the number of calendar quarters of such Performance Year in which
such Eligible Employee was a Technical Employee and the denominator of which is
four, except that in the case of an Eligible Employee who became a Technical
Employee during such Performance Year, the first calendar quarter shall not be
included in the numerator unless the Eligible Employee was a Technical Employee
throughout such calendar quarter.
4.2 Terms of Restricted Stock Awards. (a) In General.
Restricted Stock Awards shall be subject to the following terms and conditions
and shall be subject to such additional terms and conditions, not inconsistent
with the terms of the Program, as the Committee, the President of the Company or
the President of TDS shall deem advisable.
(b) Share Certificates. During the Restriction Period, a
certificate or certificates representing a Restricted Stock Award shall be
registered in the name of the Eligible Employee who was granted the award and
shall bear a legend, in addition to any legend which may be required pursuant to
Section 5.6, indicating that the ownership of the shares of Stock represented by
such certificate is subject to the restrictions, terms and conditions of the
Program. All such certificates shall be deposited with the Company, together
with stock powers or other instruments of assignment, each endorsed in blank,
which would permit transfer to the Company of all or a portion of the shares of
Stock subject to the Restricted Stock Award in the event such award is
forfeited. Subject to the Company's right to require payment of any taxes in
accordance with Section 5.5, a certificate or certificates evidencing ownership
of the requisite number of shares of Stock shall be delivered to the Eligible
Employee upon termination of the Restriction Period.
(c) Rights with Respect to Restricted Stock Awards. Unless
otherwise set forth in this Program or determined by the Committee at the time a
Restricted Stock Award is granted, and subject to the terms and conditions of a
Restricted Stock Award, the holder of such an award shall have all rights as a
stockholder of the Company, including, but not limited to, voting rights, the
right to receive dividends and the right to participate in any capital
adjustment of the Company; provided, however, that any dividend or other
distribution with respect to shares of Stock subject to a Restriction Period
shall be deposited with the Company and shall be subject to the same
restrictions as the shares of Stock with respect to which such dividend or other
distribution was made, unless the Restricted Stock Award provides otherwise.
(d) Termination of Restriction Period. Except as otherwise
provided in this Section 4.2, the termination of the Restriction Period with
respect to a Restricted Stock Award shall occur on the earliest of: (i) April 1,
2001 or (ii) the date of the termination of employment with the Company or
Affiliate of the Eligible Employee who was granted such award.
(e) Cancellation of Award Upon Certain Terminations of
Employment. Notwithstanding Section 4.2(d), if an Eligible Employee's employment
terminates prior to April 1, 2001 for a reason other than Disability, retirement
on or after attainment of age 65 or death, the Restricted Stock Award shall be
forfeited and canceled by the Company.
(f) Forfeiture of Award Upon Competition with Company or any
Affiliate or Misappropriation of Confidential Information. Notwithstanding any
other provision in the Program, any Restricted Stock subject to a Restricted
Stock Award and granted to an Eligible Employee hereunder shall be immediately
forfeited as of any date on which such Eligible Employee (i) enters into
competition with the Company or an Affiliate or (ii) misappropriates
confidential information of the Company or an Affiliate, as determined by the
Committee in its sole discretion.
For purposes of the preceding sentence, an Eligible Employee
shall be treated as entering into competition with the Company or an Affiliate
if such Eligible Employee (i) directly or indirectly, individually or in
conjunction with any person, firm or corporation, has contact with any customer
of the Company or an Affiliate or any prospective customer which has been
contacted or solicited by or on behalf of the Company or an Affiliate for the
purpose of soliciting or selling to such customer or prospective customer any
product or service, except to the extent such contact is made on behalf of the
Company or an Affiliate or (ii) otherwise competes with the Company or an
Affiliate in any manner or otherwise engages in the business of the Company or
an Affiliate.
An Eligible Employee shall be treated as misappropriating
confidential information of the Company or an Affiliate if such Eligible
Employee (i) uses confidential information (as described below) for the benefit
of anyone other than the Company or such Affiliate, as the case may be, or
discloses the confidential information to anyone not authorized by the Company
or such Affiliate, as the case may be, to receive such information, (ii) upon
termination of employment, makes any summaries of, takes any notes with respect
to, or memorizes any information or takes any confidential information
-9-
<PAGE>
or reproductions thereof from the facilities of the Company or an Affiliate or
(iii) upon termination of employment or upon the request of the Company or an
Affiliate, fails to return all confidential information then in the Eligible
Employee's possession. "Confidential information" shall mean any confidential
and proprietary drawings, reports, sales and training manuals, customer lists,
computer programs and other material embodying trade secrets or confidential
technical, business or financial information of the Company or an Affiliate.
(g) Change in Control. Notwithstanding any other provision in
the Program, in the event of either (i) a "Change in Control," as defined below
or (ii) a "change in control" within the meaning of the Telephone and Data
Systems, Inc. 1994 Long-Term Incentive Plan at a time when TDS owns directly or
indirectly at least 50% of either the outstanding stock of the Company or the
combined voting power of such stock, the Board may, but shall not be required
to, make such adjustments to outstanding awards hereunder as it deems
appropriate, including, without limitation, causing the Restriction Period of
such awards to terminate immediately. For purposes of this Section 4.2(g), a
"Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
25% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally on matters
(without regard to the election of directors) (the "Outstanding Voting
Securities"), excluding, however, the following: (i) any acquisition
directly from the Company or an Affiliate (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege, unless the security being so exercised, converted or
exchanged was acquired directly from the Company or an Affiliate, (ii)
any acquisition by the Company or an Affiliate, (iii) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate, (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this Section 4.2(g) or (v) any acquisition
by the following persons: (A) LeRoy T. Carlson or his spouse, (B) any
child of LeRoy T. Carlson or the spouse of any such child, (C) any
grandchild of LeRoy T. Carlson, including any child adopted by any
child of LeRoy T. Carlson, or the spouse of any such grandchild, (D)
the estate of any of the persons described in clauses (A)-(C), (E) any
trust or similar arrangement (including any acquisition on behalf of
such trust or similar arrangement by the trustees or similar persons)
provided that all of the current beneficiaries of such trust or similar
arrangement are persons described in clauses (A)-(C) or their lineal
descendants or (F) the voting trust which expires on June 30, 2009, or
any successor to such voting trust, including the trustees of such
voting trust on behalf of such voting trust (all such persons,
collectively, the "Exempted Persons");
(2) individuals who, as of January 1, 1998, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided that any individual who
becomes a director of the Company subsequent to January 1, 1998, and
whose election or nomination for election by the Company's stockholders
was approved by the vote of at least a majority of the directors then
comprising the Incumbent Board, shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was
initially elected as a director of the Company as a result of an actual
or threatened election contest, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall not be deemed a member
of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Transaction"), excluding, however, a Corporate Transaction pursuant to
which (i) all or substantially all of the individuals or entities who
are the beneficial owners of the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 51% of the combined voting power of
the outstanding securities of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns, either directly or
indirectly, the Company or all or substantially all of the Company's
assets) which are entitled to vote generally on matters (without regard
to the election of directors), in substantially the same proportions
relative to each other as the shares of Outstanding Voting Securities
are owned immediately prior to such Corporate Transaction, (ii) no
Person (other than the following Persons: (v) the Company or an
Affiliate, (w) any employee benefit plan (or related trust) sponsored
or maintained by the Company or an Affiliate, (x) the corporation
resulting from such Corporate Transaction, (y) the Exempted Persons and
(z) any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Voting Securities) will beneficially own, directly or
indirectly, 25% or more of the
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<PAGE>
combined voting power of the outstanding securities of such corporation
entitled to vote generally on matters (without regard to the election
of directors) and (iii) individuals who were members of the Incumbent
Board will constitute at least a majority of the members of the board
of directors of the corporation resulting from such Corporate
Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
ARTICLE V
GENERAL PROVISIONS
------------------
5.1 Effective Date and Term of Program. The Program shall be
effective as of January 1, 1998. The Program shall terminate in 2001 after the
Restricted Stock Awards for the 2000 Performance Year have been determined and
granted, unless the Program is terminated earlier by the Board. Termination of
the Program shall not affect the terms or conditions of any Restricted Stock
Award granted prior to the Program's termination.
5.2 Shares Available. Subject to adjustment as provided in
Section 5.7 of the Program, 100,000 shares of Common Stock initially shall be
available under the Program, and at any other time the number of shares
available under the Program shall be such number, reduced by the sum of the
aggregate number of shares of Common Stock which are issued pursuant to
outstanding Restricted Stock Awards. To the extent that a Restricted Stock Award
is forfeited, the shares of Stock subject to such forfeited portion of such
award shall again be available under the Program. Shares of Stock to be
delivered under the Program shall be made available from authorized and unissued
shares of Stock, or authorized and issued shares of Stock reacquired and held as
treasury shares or otherwise or a combination thereof.
5.3 Amendments. The Board may amend the Program as it shall
deem advisable. No amendment may impair the rights of a holder of an outstanding
Restricted Stock Award without the consent of such holder.
5.4 Transferability. No share of Restricted Stock subject to a
Restricted Stock Award shall be transferrable other than (a) by will or the laws
of descent and distribution or (b) pursuant to a beneficiary designation
effective on the Eligible Employee's death. Except as permitted by the preceding
sentence, no share of Restricted Stock subject to a Restricted Stock Award may
be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process. Upon any attempt by an Eligible
Employee granted a Restricted Stock Award to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any share of Restricted Stock, the
Restricted Stock Award and all rights thereunder shall immediately become null
and void.
5.5 Tax Withholding. The Company shall have the right to
require, prior to the delivery of any shares of Stock or the payment of any cash
pursuant to a Restricted Stock Award made hereunder, payment by the holder of
such award of any federal, state, local or other taxes which may be required to
be withheld or paid in connection with such award ("Required Tax Payments").
Subject to approval by the Committee, the holder of an award may elect to
satisfy his or her obligation to advance the Required Tax Payments by any of the
following means: (a) a cash payment to the Company, (b) delivery to the Company
of previously owned whole shares of Stock (which the holder has held for at
least six months prior to the delivery of such shares of Stock or which the
holder purchased on the open market and for which the holder has good title,
free and clear of all liens and encumbrances) the aggregate fair market value of
which shall be determined as of the date the obligation to withhold or pay taxes
arises in connection with the Award (the "Tax Date"), (c) authorizing the
Company to withhold whole shares of Stock which would otherwise be delivered or
to withhold an amount of cash which would otherwise be payable to the holder
pursuant to the Award the aggregate fair market value of which shall be
determined as of the Tax Date, (d) a cash payment by a broker-dealer acceptable
to the Company to whom the holder has submitted an irrevocable notice of
exercise or (e) any combination of (a), (b) and (c). If the holder shall fail to
advance the Required Tax Payments after request by the Company, the Company may,
in its discretion, withhold whole shares of Stock which would otherwise be
delivered or withhold an amount of cash which would otherwise be payable to the
holder pursuant to the Award, provided that the fair market value of shares of
Stock or the amount of cash withheld is equal to the Required Tax Payments.
Shares of Stock to be delivered or withheld may not have an aggregate fair
market value in excess of the minimum amount required to be withheld. Any
fraction of a share of Stock which would be required to satisfy such an
obligation shall be disregarded and the remaining amount due shall be paid in
cash by the holder.
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<PAGE>
5.6 Restrictions on Shares. Each Restricted Stock Award made
hereunder shall be subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the shares of
Stock subject to such award upon any securities exchange or under any law, the
consent or approval of any governmental body or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the delivery
of shares thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Stock delivered
pursuant to any Restricted Stock Award made hereunder bear a legend indicating
that the sale, transfer or other disposition thereof by the holder is prohibited
except in compliance with the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
5.7 Adjustment. In the event of any conversion, stock split,
stock dividend, recapitalization, reclassification, reorganization, merger,
consolidation, spin-off, combination of shares in a reverse stock split or other
similar event, the number and class of securities available under the Program,
and the number and class of securities subject to each outstanding Restricted
Stock Award shall be appropriately adjusted by the Company. To the extent that
any adjustment under this Section 5.7 entitles an Eligible Employee to receive
any additional shares of Stock or other securities, the shares of Stock
available under the Program shall be deemed to include such additional shares of
Stock and other securities. If any such adjustment would result in a fractional
security being available under the Program, such fractional security shall be
disregarded. If any such adjustment would result in a fractional security being
subject to an outstanding Restricted Stock Award, the Company shall pay the
holder of such award, in connection with the first vesting of such award, in
whole or in part, occurring after such adjustment, an amount in cash determined
by multiplying (i) the fraction of such security (rounded to the nearest
hundredth) by (ii) the excess, if any, of (A) the fair market value on the
vesting date over (B) the purchase price, if any, of such security. Any
determination made by the Company under this Section 5.7 shall be final, binding
and conclusive.
5.8 No Right of Participation or Employment. No person shall
have any right to participate in the Program. Neither the Program nor any award
made hereunder shall confer upon any person any right to continued employment by
the Company or any Affiliate or affect in any manner the right of the Company or
any Affiliate to terminate the employment of any person at any time without
liability hereunder.
5.9 Rights as Stockholder. No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.
5.10 Governing Law. The Program and each award hereunder, and
all determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the Internal Revenue Code of 1986, as amended or the laws
of the United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
5.11 Severability. If a provision of the Program shall be held
illegal or invalid, the illegality or invalidity shall not affect the remaining
parts of the Program and the Program shall be construed and enforced as if the
illegal or invalid provision had not been included in the Program.
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<PAGE>
SCHEDULE
--------
================================================================================
Performance Levels and Salary Percentages
Performance =========================================================
Year U BC FC FC+ C C+ O
================================================================================
1998 0% 0% 7.5% 11.5% 15% 20% 25%
1999 0% 0% 7.5% 11.5% 15% 20% 25%
2000 0% 0% 7.5% 11.5% 15% 20% 25%
3 Year Total 0% 0% 22.5% 34.5% 45% 60% 75%
================================================================================
Description of Performance Levels
- - ---------------------------------
"O" Outstanding: Consistently achieves results far beyond performance
- - --------------- expectations.
"C" Commendable: Consistently meets performance expectations and
- - --------------- occasionally achieves results beyond
performance expectations.
"FC" Fully Competent: Consistently meets performance expectations.
- - --------------------
"BC" Below Competent: Frequently approaches, but does not consistently meet
- - -------------------- performance expectations.
"U" Unsatisfactory: Consistently falls short of performance expectations.
- - ------------------
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<PAGE>
EXHIBIT 99.4
UNITED STATES CELLULAR CORPORATION
1998 LONG-TERM INCENTIVE PROGRAM
ARTICLE I
PURPOSE
-------
This United States Cellular Corporation 1998 Long-Term Incentive
Program (the "Program") is an amendment and restatement of the United States
Cellular Corporation 1994 Long-Term Incentive Plan (the "Plan"). The purposes of
the Program are (i) to align the interests of the stockholders of United States
Cellular Corporation (the "Company") and the key executive and management
employees of the Company and certain of its subsidiaries by increasing the
proprietary interest of such employees in the Company's growth and success, (ii)
to advance the interests of the Company by attracting and retaining such key
executive and management employees of the Company and such subsidiaries, and
(iii) to motivate such employees to act in the long-term best interests of the
Company's stockholders.
ARTICLE II
DEFINITIONS
-----------
For purposes of the Plan, the following capitalized terms shall have
the meanings set forth in this Article.
2.1 "Affiliate" shall mean TDS or a corporation at least 50% of whose
outstanding stock or the combined voting power of such outstanding stock is
owned directly or indirectly by TDS or by the Company.
2.2 "Agreement" shall mean a written agreement evidencing an award
granted hereunder between the Company and the recipient of such award.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Bonus Year" shall mean the calendar year for which an annual bonus
is payable.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Committee" shall mean a committee designated by the Board
consisting of one or more members of the Board, each of whom is an "outside
director" within the meaning of Section 162(m) of the Code and a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Exchange Act.
2.7 "Common Stock" shall mean the class of shares of the Company
designated as "Common Shares" in its Articles of Incorporation.
2.8 "Company Match" shall mean an amount credited to an employee's
Deferred Compensation Account pursuant to paragraph 7.2(b) hereof based on the
deferred portion of the employee's annual bonus for a Bonus Year.
2.9 "Deferred Compensation Account" shall mean a book reserve
maintained by the Company for the purpose of measuring the amount of deferred
compensation payable to an employee with respect to the deferred portion of the
employee's annual bonus for a Bonus Year.
2.10 "Designated Beneficiary" shall mean the person or persons entitled
to receive the remaining Distributable Balance in an employee's Deferred
Compensation Account at the employee's death.
2.11 "Disability" shall mean a total physical disability which, in the
Committee's judgment, prevents an employee from performing substantially such
employee's employment duties and responsibilities for a continuous period of at
least six months.
2.12 "Distributable Balance" shall mean the balance in an employee's
Deferred Compensation Account that is distributable to the employee upon
termination of the employee's employment or the earlier distribution date
specified by the employee.
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2.13 "Employer" shall mean the Company, USCC Payroll Corporation, and
any other direct or indirect subsidiary of the Company selected by the Committee
and approved by the Board.
2.14 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
2.15 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.16 "Fair Market Value" of a share of Stock shall mean its closing
sale price on the principal national stock exchange on which the Stock is traded
on the date as of which such value is being determined, or, if there shall be no
reported sale for such date, on the next preceding date for which a sale was
reported; provided that if Fair Market Value for any date cannot be so
determined, Fair Market Value shall be determined by the Committee by whatever
means or method as the Committee, in the good faith exercise of its discretion,
shall at such time deem appropriate.
2.17 "Free-Standing SAR" shall mean an SAR which is not issued in
tandem with, or by reference to, an option, which entitles the holder thereof to
receive, upon exercise, shares of Stock (which may be Restricted Stock), cash or
a combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Stock on the date of exercise over the base price
of such SAR, multiplied by the number of such SARs which are exercised.
2.18 "Incentive Stock Option" shall mean an option to purchase shares
of Stock which meets the requirements of section 422 of the Code (or any
successor provision) and which is designated as intended to constitute an
Incentive Stock Option.
2.19 "Legal Representative" shall mean a guardian, legal representative
or other person acting in a similar capacity with respect to an optionee.
2.20 "Mature Shares" shall mean shares of Stock (i) for which the
holder thereof has good title, free and clear of all liens and encumbrances, and
(ii) which such holder has held for at least six months or has purchased on the
open market.
2.21 "Non-Qualified Stock Option" shall mean an option to purchase
shares of Stock which is not an Incentive Stock Option.
2.22 "Performance Award" shall mean a right, contingent upon the
attainment of specified Performance Measures within a specified Performance
Period, to receive payment in cash or in shares of Stock of a specified amount.
2.23 "Performance Measures" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met (i) as a condition
to the exercisability of all or a portion of an option, (ii) as a condition to
the grant of a Restricted Stock Award or (iii) during the applicable Restriction
Period or Performance Period as a condition to the holder's receipt, in the case
of a Restricted Stock Award, of the shares of Stock subject to such award, or,
in the case of a Performance Award, of the payment with respect to such award.
In the sole discretion of the Committee, the Committee may amend or adjust the
Performance Measures or other terms and conditions of an outstanding award in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in law or accounting principles. If the
Committee desires that compensation payable pursuant to any award subject to
Performance Measures be "qualified performance-based compensation" within the
meaning of section 162(m) of the Code, the Performance Measures (i) shall be
established in writing by the Committee no later than 90 days after the
beginning of the Performance Period or Restriction Period, as applicable (or
such other time designated by the Internal Revenue Service) and (ii) shall
satisfy all other applicable requirements imposed under Treasury Regulations
promulgated under section 162(m) of the Code, including the requirement that
such Performance Measures be stated in terms of an objective formula or
standard.
2.24 "Performance Period" shall mean a period designated by the
Committee during which Performance Measures shall be measured.
2.25 "Permanent and Total Disability" shall have the meaning set forth
in section 22(e)(3) of the Code (or any successor thereto).
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2.26 "Permitted Transferee" shall mean (i) an optionee's spouse, (ii)
any of an optionee's lineal descendants or (iii) a trust or similar arrangement
of which such spouse, a lineal descendant of such optionee, or one or more of
such persons are the only current beneficiaries, provided that such spouse or
descendant (or the Legal Representative of such spouse or descendant) or such
trust or similar arrangement, as the case may be, has entered into a written
agreement with the Company authorizing the Company to withhold shares of Stock
which would otherwise be delivered to such person upon an exercise of a
Non-Qualified Stock Option to pay any federal, state, local or other taxes which
may be required to be withheld or paid in connection with such exercise in the
event that the optionee does not provide for an arrangement satisfactory to the
Company to assure that such taxes will be paid.
2.27 "Restricted Stock" shall mean shares of Stock which are subject to
a Restriction Period.
2.28 "Restricted Stock Award" shall mean an award of Restricted Stock
under the Plan.
2.29 "Restriction Period" shall mean any period designated by the
Committee during which the Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in the Plan or the Agreement relating to such
award.
2.30 "SAR" shall mean a stock appreciation right which may be a
Free-Standing SAR or a Tandem SAR.
2.31 "Stock" shall mean Common Stock and any other equity security
which (i) is designated by the Board to be available for awards under the Plan
or (ii) becomes available for awards under the Plan by reason of a stock split,
stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, spin-off or other similar change in
capitalization or event or any distribution to holders of shares of Common
Stock.
2.32 "Tandem SAR" shall mean an SAR which is granted in tandem with, or
by reference to, an option (including a Non-Qualified Stock Option granted prior
to the date of grant of the SAR), which entitles the holder thereof to receive,
upon exercise of such SAR and surrender for cancellation of all or a portion of
such option, shares of Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Stock on the date of exercise over the base price
of such SAR, multiplied by the number of shares of Stock subject to such option,
or portion thereof, which is surrendered.
2.33 "TDS" shall mean Telephone and Data Systems, Inc., an Iowa
corporation.
ARTICLE III
ELIGIBILITY AND ADMINISTRATION
------------------------------
3.1 Eligibility. Participants in the Plan shall consist of such key
executive and management employees of the Employers as the Committee in its sole
discretion may select from time to time. The Committee's selection of an
employee to participate in the Plan at any time shall not require the Committee
to select such employee to participate in the Plan at any other time.
3.2 Administration. The Plan shall be administered by the Committee.
Any one or a combination of the following awards may be made under the Plan to
eligible persons: (i) options to purchase shares of Stock in the form of
Incentive Stock Options or Non-Qualified Stock Options, (ii) SARs in the form of
Tandem SARs or Free-Standing SARS, (iii) Restricted Stock Awards, (iv)
Performance Awards and (v) Company Match awards. The Committee shall, subject to
the terms of the Plan, select eligible persons for participation in the Plan and
determine the form, amount and timing of each award to such persons and, if
applicable, the number of shares of Stock and the number of SARs subject to such
an award, the exercise price associated with the award, the time and conditions
of exercise or settlement of the award and all other terms and conditions of the
award, including, without limitation, the form of the Agreement evidencing the
award. The Committee may, in its sole discretion and for any reason at any time,
subject to the requirements imposed under section 162(m) of the Code and
regulations promulgated thereunder in the case of an award intended to be
qualified performance-based compensation, take action such that (A) any or all
outstanding options and SARs shall become exercisable in part or in full, (B)
all or a portion of the Restriction Period applicable to any outstanding
Restricted Stock Award shall lapse, (C) all or a portion of the Performance
Period applicable to any outstanding Performance Award shall lapse, (D) the
Performance
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Measures applicable to any outstanding Restricted Stock Award (if any) and to
any outstanding Performance Award shall be deemed to be satisfied at the maximum
or any other level and (E) all or a portion of the amount in a Deferred
Compensation Account attributable to a Company Match shall vest. The Committee
shall, subject to the terms of the Plan, interpret the Plan and the application
thereof, establish rules and regulations it deems necessary or desirable for the
administration of the Plan and may impose, incidental to the grant of an award,
conditions with respect to the award, such as limiting competitive employment or
other activities. All such interpretations, rules, regulations and conditions
shall be final, binding and conclusive.
(a) Delegation. The Committee may delegate some or all of its power and
authority hereunder to the chairman of the Board or an executive officer of the
Company as the Committee deems appropriate; provided, however, that the
Committee may not delegate its power and authority with regard to (i) the
selection for participation in the Plan of (A) an employee who is the chief
executive officer of the Company (or is acting in such a capacity), one of the
four highest compensated officers of the Company (other than the chief executive
officer), or any other person deemed to be a "covered employee" within the
meaning of section 162(m) of the Code or who, in the Committee's judgment, is
likely to be a covered employee at any time during the period an award to be
granted to such employee may result in taxable income to the employee, or (B) an
officer or other person subject to section 16 of the Exchange Act, or (ii)
decisions concerning the timing, pricing or number of shares subject to an award
granted to such an employee, officer or other person who is, or who in the
Committee's judgment is likely to be, a covered employee.
(b) Indemnification. No member of the Board or Committee nor any
executive officer to whom the Committee shall delegate any of its power and
authority hereunder shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan,
and each member of the Board and the Committee and each executive officer who is
designated by the Committee to exercise any power or authority hereunder shall
be entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including attorneys' fees) arising therefrom
to the full extent permitted by law, except as otherwise may be provided in the
Company's articles of incorporation or by-laws, and under any directors' and
officers' liability insurance which may be in effect from time to time.
3.3 Shares Available. Subject to adjustment as provided in Section 8.7,
1,650,000 shares of Common Stock shall be available under the Plan. Such shares
of Common Stock and shares of each other class of Stock which are available
under the Plan shall be reduced by the sum of the aggregate number of shares of
such Stock then subject to outstanding awards under the Plan. To the extent that
an outstanding award expires or terminates unexercised or is cancelled or
forfeited, then the shares of Stock subject to such expired, unexercised,
cancelled or forfeited portion of such award shall again be available under the
Plan. Shares of Stock to be delivered under the Plan shall be made available
from authorized and unissued shares of Stock, or authorized and issued shares of
Stock reacquired and held as treasury shares or otherwise or a combination
thereof.
ARTICLE IV
STOCK OPTIONS AND
STOCK APPRECIATION RIGHTS
-------------------------
4.1 Stock Options. The Committee may, in its discretion, grant options
to purchase shares of Stock to such eligible employees as may be selected by the
Committee. Each option, or portion thereof, that is not an Incentive Stock
Option, shall be a Non-Qualified Stock Option. Each Incentive Stock Option shall
be granted within ten years of the effective date of the Plan. To the extent
that the aggregate Fair Market Value (determined as of the date of grant) of
shares of Stock with respect to which options designated as Incentive Stock
Options are exercisable for the first time by an option holder during any
calendar year (under the Plan or any other plan of the Company or any of its
subsidiaries) exceeds $100,000, such options shall constitute Non-Qualified
Stock Options. Options shall be subject to the terms and conditions set forth in
this Section 4.1 and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem advisable,
except that the Committee shall not grant an option or options in any calendar
year to any eligible employee which, in the aggregate, give such an employee an
option to purchase more than 50,000 shares of Stock (as may be adjusted pursuant
to Section 8.7).
4.2 Number of Shares and Purchase Price. The number of shares of Stock
subject to an option and the purchase price per share of Stock purchasable upon
exercise of the option shall be determined by the Committee; provided,
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however, that the purchase price per share of Stock purchasable upon exercise of
either an Incentive Stock Option or a NonQualified Stock Option shall not be
less than 100% of the Fair Market Value of a share of Stock on the date such
option is granted; provided further, that if an Incentive Stock Option shall be
granted to an employee who owns capital stock possessing more than ten percent
of the total combined voting power of all classes of capital stock of the
Company or any of its subsidiaries ("Ten Percent Holder"), the purchase price
per share of Stock shall be at least 110% of its Fair Market Value.
4.3 Option Period and Exercisability. The period during which an option
may be exercised shall be determined by the Committee; provided, however, that
no Incentive Stock Option shall be exercised later than ten years after its date
of grant; provided further, that if an Incentive Stock Option shall be granted
to a Ten Percent Holder, such option shall not be exercised later than five
years after its date of grant. The Committee may, in its discretion, establish
Performance Measures which must be satisfied during a Performance Period as a
condition either to a grant of an option or to the exercisability of all or a
portion of an option. The Committee shall determine whether an option shall
become exercisable in cumulative or non-cumulative installments or in part or in
full at any time. An option may be exercised only with respect to whole shares
of Stock.
4.4 Method of Exercise. An option may be exercised (i) by giving
written notice to the Chief Financial Officer of the Company specifying the
number of whole shares of Stock to be purchased and by accompanying such notice
with payment therefor in full (unless another arrangement for such payment which
is satisfactory to the Company has been made) either (A) in cash, (B) in Mature
Shares having a Fair Market Value, determined as of the date of exercise, equal
to the aggregate purchase price payable by reason of such exercise, (C) by
authorizing the Company to withhold whole shares of Stock which would otherwise
be delivered upon exercise of the option having a Fair Market Value, determined
as of the date of exercise, equal to the aggregate purchase price payable by
reason of such exercise, (D) in cash by a broker-dealer acceptable to the
Company to whom the optionee has submitted an irrevocable notice of exercise or
(E) a combination of (A), (B) and (C), in each case to the extent determined by
the Committee at the time the option is granted, and (ii) by executing such
documents as the Company may reasonably request. The Committee shall have sole
discretion to disapprove of an election pursuant to any of clauses (B)-(E) in
the preceding sentence. If payment of the purchase price is to be made pursuant
to clause (B) or (C) (or a combination thereof) of the first sentence of this
Section 4.4, any fraction of a share of Stock which would be required to pay
such purchase price shall be disregarded and the remaining amount due shall be
paid in cash by the optionee. No share of Stock shall be delivered until the
full purchase price therefor has been paid.
4.5 Stock Appreciation Rights. The Committee may, in its discretion,
grant SARs to such eligible employees as may be selected by the Committee. The
Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.
SARs shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:
(a) Number of SARs and Base Price. The number of SARs subject to an
award shall be determined by the Committee. Any Tandem SAR related to an
Incentive Stock Option shall be granted at the same time that such Incentive
Stock Option is granted. The base price of a Tandem SAR shall be the purchase
price per share of Stock of the related option. The base price of a
Free-Standing SAR shall be determined by the Committee; provided, however, that
such base price shall not be less than 100% of the Fair Market Value of a share
of Stock on the date of grant of such SAR.
(b) Exercise Period and Exercisability. The Agreement relating to an
award of SARs shall specify whether such award may be settled in shares of Stock
or cash or a combination thereof. The period for the exercise of an SAR shall be
determined by the Committee; provided, however, that no Tandem SAR shall be
exercised later than the expiration, cancellation, forfeiture or other
termination of the related option. The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a condition to
the grant of an SAR or to the exercisability of all or a portion of an SAR. The
Committee shall determine whether an SAR may be exercised in cumulative or
non-cumulative installments and in part or in full at any time. An exercisable
SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only
with respect to whole shares of Stock and, in the case of a Free-Standing SAR,
only with respect to a whole number of SARs. Prior to the exercise of an SAR for
shares of Stock, the holder of such SAR shall have no rights as a stockholder of
the Company with respect to the shares of Stock subject to such SAR.
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(c) Method of Exercise. A Tandem SAR may be exercised (i) by giving
written notice to the Company specifying the number of whole SARs which are
being exercised, (ii) by surrendering to the Company any options which are
cancelled by reason of the exercise of the Tandem SAR and (iii) by executing
such documents as the Company may reasonably request. A Free-Standing SAR may be
exercised (A) by giving written notice to the Company specifying the whole
number of SARs which are being exercised and (B) by executing such documents as
the Company may reasonably request.
4.6 Termination of Employment or Service. All of the terms relating to
the exercise, cancellation or other disposition of an option or SAR upon a
termination of employment with or service to the Company of the holder of such
option whether by reason of disability, retirement, death or other termination,
shall be determined by the Committee. Such determination shall be made at the
time of the grant of such option or SAR and shall be specified in the Agreement
relating to such option or SAR.
ARTICLE V
RESTRICTED STOCK AWARDS
-----------------------
5.1 Restricted Stock Awards. The Committee may, in its discretion,
grant Restricted Stock Awards to such eligible employees as may be selected by
the Committee.
5.2 Terms of Restricted Stock Awards. Restricted Stock Awards shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.
(a) Number of Shares and Other Terms. The number of shares of Stock
subject to a Restricted Stock Award and the Performance Measures (if any) and
Restriction Period applicable to a Restricted Stock Award shall be determined by
the Committee.
(b) Vesting and Forfeiture. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Stock subject to such award (i) if specified Performance Measures are
satisfied or met during the specified Restriction Period or (ii) if the holder
of such award remains continuously in the employment of or service to the
Company during the specified Restriction Period and for the forfeiture of the
shares of Stock subject to such award (A) if specified Performance Measures are
not satisfied or met during the specified Restriction Period or (B) if the
holder of such award does not remain continuously in the employment of or
service to the Company during the specified Restriction Period.
(c) Share Certificates. During the Restriction Period, a certificate or
certificates representing a Restricted Stock Award may be registered in the
holder's name and may bear a legend, in addition to any legend which may be
required pursuant to Section 8.6, indicating that the ownership of the shares of
Stock represented by such certificate is subject to the restrictions, terms and
conditions of this Plan and the Agreement relating to the Restricted Stock
Award. All such certificates shall be deposited with the Company, together with
stock powers or other instruments of assignment (including a power of attorney),
each endorsed in blank with a guarantee of signature if deemed necessary or
appropriate by the Company, which would permit transfer to the Company of all or
a portion of the shares of Stock subject to the Restricted Stock Award in the
event such award is forfeited in whole or in part. Upon termination of any
applicable Restriction Period (and the satisfaction or attainment of applicable
Performance Measures), subject to the Company's right to require payment of any
taxes in accordance with Section 8.5, a certificate or certificates evidencing
ownership of the requisite number of shares of Stock shall be delivered to the
holder of such award.
(d) Rights with Respect to Restricted Stock Awards. Unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, and subject to
the terms and conditions of a Restricted Stock Award, the holder of such award
shall have all rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the right to
participate in any capital adjustment applicable to all holders of Stock;
provided, however, that a distribution with respect to shares of Stock, other
than a regular cash dividend, shall be deposited with the Company and shall be
subject to the same restrictions as the shares of Stock with respect to which
such distribution was made.
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(e) Awards to Certain Executive Officers. Notwithstanding any other
provision of this Article V, and only to the extent necessary to ensure the
deductibility of the award to the Company, the number of shares of Stock subject
to a Restricted Stock Award granted to a "covered employee" within the meaning
of section 162(m) of the Code shall not exceed 50,000 shares.
5.3 Termination of Employment or Service. All of the terms relating to
the satisfaction of Performance Measures and the termination of the Restriction
Period relating to a Restricted Stock Award, or any cancellation or forfeiture
of such Restricted Stock Award upon a termination of employment with or service
to the Company of the holder of such Restricted Stock Award, whether by reason
of disability, retirement, death or other termination, shall be determined by
the Committee. Such determination shall be made at the time of the grant of such
Restricted Stock Award and shall be specified in the Agreement relating to such
Restricted Stock Award.
ARTICLE VI
PERFORMANCE AWARDS
------------------
6.1 Performance Awards. The Committee may, in its discretion, grant
Performance Awards to such eligible employees as may be selected by the
Committee.
6.2 Terms of Performance Awards. Performance Awards shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem advisable.
(a) Amount of Performance Award, Performance Measures and Performance
Period. The amount of a Performance Award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee; provided, however that the maximum amount that may be paid to any
individual under a Performance Award for any Performance Period shall not exceed
50,000 shares of Stock, or the Fair Market Value thereof if paid in cash.
(b) Vesting and Forfeiture. The Agreement relating to a Performance
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of the Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such award, if specified
Performance Measures are not satisfied or met during the specified Performance
Period.
(c) Settlement of Vested Performance Awards. The Agreement relating to
a Performance Award (i) shall specify whether such award may be settled in
shares of Stock (including shares of Restricted Stock) or cash or a combination
thereof and (ii) may specify whether the holder thereof shall be entitled to
receive, on a current or deferred basis, dividend equivalents, and, if
determined by the Committee, interest on or the deemed reinvestment of any
deferred dividend equivalents, with respect to the number of shares of Stock
subject to such award. Prior to the settlement of a Performance Award in shares
of Stock, the holder of such award shall have no rights as a stockholder of the
Company with respect to the shares of Stock subject to such award.
6.3 Termination of Employment or Service. All of the terms relating to
the satisfaction of Performance Measures and the termination of the Performance
Period relating to a Performance Award, or any cancellation or forfeiture of
such Performance Award upon a termination of employment with the Company of the
holder of such Performance Award, whether by reason of disability, retirement,
death or other termination, shall be determined by the Committee. Such
determination shall be made at the time of the grant of such Performance Award
and shall be specified in the Agreement relating to such Performance Award.
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ARTICLE VII
DEFERRED COMPENSATION ACCOUNTS
AND COMPANY MATCH AWARDS
------------------------
7.1 Company Match Awards. The Committee may, in its discretion, make
Company Match awards available to such eligible employees as may be selected by
the Committee.
7.2 Terms of Company Match Awards. Company Match awards shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan as the
Committee shall deem advisable.
(a) Annual Bonus Deferral. There shall be deducted from each check in
full or partial payment of an employee's annual bonus for a Bonus Year, an
amount equivalent to the percentage of the gross bonus payment that the employee
has elected to defer, which amount will be credited as of the date on which the
check is issued to the employee's Deferred Compensation Account. Amounts so
credited to the employee's Deferred Compensation Account (as adjusted for deemed
investment returns) shall be 100% vested at all times.
(b) Company Match. As of each date on which amounts are credited to an
employee's Deferred Compensation Account pursuant to paragraph (a), there shall
also be credited to the Deferred Compensation Account a Company Match amount
equal to the sum of (i) 25% of the amount credited to the Deferred Compensation
Account as of such date pursuant to paragraph (a) which is not in excess of
one-half of the employee's total gross bonus for the Bonus Year and (ii) 33 1/3%
of the amount credited to the Deferred Compensation Account as of such date
pursuant to paragraph (a) which is in excess of one-half of the employee's total
gross bonus for the Bonus Year. One-third of the Company Match amount so
credited to the employee's Deferred Compensation Account pursuant to this
paragraph (b) (as adjusted for deemed investment returns hereunder) shall become
vested on each of the first three anniversaries of the end of the Bonus Year,
provided that the employee is an employee of the Company (or an Affiliate) on
such date and the amount credited to the Deferred Compensation Account pursuant
to paragraph (a) has not been withdrawn or distributed before such date.
(c) Deemed Investment of Deferred Compensation Account. Amounts
credited to an employee's Deferred Compensation Account pursuant to paragraphs
(a) and (b) above shall be deemed to be invested in whole and fractional shares
of Stock at the Fair Market Value thereof on the date as of which the amount is
credited to the Deferred Compensation Account.
(d) Payment of Deferred Compensation. On the earlier of the date
specified by the employee or the date the employee terminates his/her employment
for whatever reason, the Company shall compute the "Distributable Balance" in
the Deferred Compensation Account on such date. This Distributable Balance shall
include (i) all bonus deferrals made through the current month and (ii) if the
employee's employment has terminated for retirement, disability or death, all
Company Match amounts credited to the Deferred Compensation Account, or, if the
employee's employment has not terminated or has terminated for any other reason,
the vested Company Match amounts credited to the Deferred Compensation Account.
In the event that the employee becomes disabled, his/her employment shall for
these purposes be deemed to terminate on the first day of the month in which
he/she begins to receive long term disability payments provided by the Company's
insurance carrier (thus, the Distributable Balance shall be computed as of the
preceding month). Payment of deferred compensation under these events will be in
accordance with the employee's payment method and distribution date elections.
For purposes of this paragraph (d), "disability" shall mean a total physical
disability which, in the Company's judgment, prevents the employee from
performing substantially his/her employment duties and responsibilities for a
continuous period of at least six months, and "retirement" shall mean retirement
as defined in the United States Cellular Corporation Pension Plan. All payments
of deferred compensation hereunder will be made in whole shares of Stock and
cash equal to the Fair Market Value of any fractional share. If the employee
dies before the entire Distributable Balance has been paid, the Company shall
pay the then undistributed remainder of the Distributable Balance to the
employee's Designated Beneficiary.
(e) Hardship Withdrawals. In the event of an unforeseeable emergency,
the employee may make withdrawals from the vested amounts in the Deferred
Compensation Account in an amount equal to that which is reasonably necessary to
satisfy the emergency. An unforeseeable emergency means a severe financial
hardship to the employee resulting from
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a sudden and unexpected illness or accident of the employee or of a dependent
(as defined in section 152(a) of the Code) of the employee, loss of the
employee's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the employee. The circumstances that will constitute an emergency will depend
upon the facts of each case, but, in any case, payment may not be made to the
extent that such hardship is or may be relieved (i) through reimbursement or
compensation by insurance or otherwise; (ii) by liquidation of the employee's
assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship; or (iii) by cessation of deferrals under this Plan.
Examples of what are not considered to be unforeseeable emergencies include the
need to send the employee's child to college or the desire to purchase a home.
(f) Designation of Beneficiaries. The employee may designate a
Designated Beneficiary by executing and filing with the Company during his/her
lifetime, a beneficiary designation. The employee may change or revoke any such
designation by executing and filing with the Company during his/her lifetime a
new beneficiary designation. If the employee is married and names someone other
than his/her spouse (e.g., child) as beneficiary, the spouse must consent by
signing the designated area of the beneficiary designation form in the presence
of a Notary Public. If any Designated Beneficiary predeceases the employee, or
if any corporation, partnership, trust or other entity which is a Designated
Beneficiary is terminated, dissolved, becomes insolvent, is adjudicated bankrupt
prior to the date of the employee's death, or if the employee fails to designate
a beneficiary, then the following persons in the order set forth below shall
receive the entire amount which the previous Designated Beneficiary would have
been entitled to receive:
i) Employee's spouse, if living; otherwise
ii) Employee's then living descendants, per stirpes; and
otherwise;
iii) Employee's estate
ARTICLE VIII
GENERAL
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8.1 Effective Date and Term of Plan. The Plan shall become effective as
of November 9, 1994 and shall terminate ten years thereafter unless terminated
earlier by the Board. Termination of the Plan shall not affect the terms or
conditions of any award granted prior to termination. Grants of awards hereunder
may be made at any time on or after the effective date and prior to the
termination of the Plan. The Program shall be submitted to the stockholders of
the Company for approval, and in the event that the Program is not approved by
such stockholders, any awards granted under the Program shall be void.
8.2 Amendments. The Board may amend the Plan as it shall deem
advisable, subject to any requirement of stockholder approval under applicable
law, including section 162(m) of the Code; provided, however, that, except as
provided in Section 8.7, no amendment shall be made without stockholder approval
if such amendment (a) would increase the maximum number of shares of Stock
available for issuance under the Plan or (b) would reduce the minimum purchase
price in the case of an option; provided further that no amendment shall extend
the term of the Plan or shall effect any change inconsistent with section 422 of
the Code with respect to any Incentive Stock Option which shall have been, or
may be, granted under the Plan. No amendment may impair the rights of a holder
of an outstanding award without the consent of such holder.
8.3 Award. Each award granted under the Plan shall be evidenced by an
Agreement setting forth the terms and conditions applicable to such award. No
award shall be valid until an Agreement is executed by the Company and the
recipient of the award and, upon execution by each party and delivery of the
Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.
8.4 Transferability of Awards. No Incentive Stock Option shall be
transferable other than by will or the laws of descent and distribution or
pursuant to a beneficiary designation effective on the optionee's death. No
other award shall be transferable other than (a) by will or the laws of descent
and distribution, (b) pursuant to a beneficiary designation effective on the
optionee's death, or (c) to the extent permitted under (i) securities laws
relating to the registration of securities subject to employee benefit plans and
(ii) the Agreement evidencing the grant of such award, by gift to a Permitted
Transferee. Each option and each SAR may be exercised during the optionee's or
holder's lifetime only by the optionee or
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holder (or the optionee's or holder's legal representative) or, if applicable,
by a Permitted Transferee. Except as permitted by the preceding sentences, no
award may be sold, transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or be subject
to execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
award such award and all rights thereunder shall immediately become null and
void.
8.5 Tax Withholding. The Company shall have the right to require, prior
to the issuance or delivery of any shares of Stock, payment by the holder of the
award of any federal, state, local or other taxes which may be required to be
withheld or paid in connection with the award. As determined by the Committee at
the time of the grant of an award, an Agreement may provide that (i) the Company
shall withhold whole shares of Stock which would otherwise be delivered to a
holder, having an aggregate Fair Market Value determined as of the date the
obligation to withhold or pay taxes arises in connection with an award (the "Tax
Date") in the amount necessary to satisfy any such obligation or (ii) the holder
may satisfy any such obligation by any of the following means: (A) a cash
payment to the Company, (B) delivery to the Company of Mature Shares the
aggregate Fair Market Value of which shall be determined as of the Tax Date, (C)
authorizing the Company to withhold whole shares of Stock which would otherwise
be delivered the aggregate Fair Market Value of which shall be determined as of
the Tax Date, (D) a cash payment by a broker-dealer acceptable to the Company to
whom the holder has submitted an irrevocable notice of exercise or (E) any
combination of (A), (B) and (C); provided, however, that the Committee shall
have sole discretion to disapprove of an election pursuant to any of clauses
(B)-(E). An Agreement may provide for shares of Stock to be delivered or
withheld having an aggregate Fair Market Value in excess of the minimum amount
required to be withheld. Any fraction of a share of Stock which would be
required to satisfy such an obligation shall be disregarded and the remaining
amount due shall be paid in cash by the holder.
8.6 Restrictions on Shares. Each award granted hereunder shall be
subject to the requirement that if at any time the Company determines that the
listing, registration or qualification of the shares of Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Stock delivered
pursuant to any award made hereunder bear a legend indicating that the sale,
transfer or other disposition thereof by the holder is prohibited except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
8.7 Adjustment. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Stock other than a regular cash
dividend, the number and class of securities available under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security, the terms of each outstanding SAR, the number and
class of securities subject to each outstanding Restricted Stock Award, and the
terms of each outstanding Performance Award and the number and class of
securities deemed to be held in each Deferred Compensation Account shall be
appropriately adjusted by the Committee, such adjustments to be made in the case
of outstanding options and SARs without an increase in the aggregate purchase
price or base price. The decision of the Committee regarding any such adjustment
shall be final, binding and conclusive. If any such adjustment would result in a
fractional security being (a) available under this Plan, such fractional
security shall be disregarded, or (b) subject to an award under this Plan, the
Company shall pay the holder of such award, in connection with the first
vesting, exercise or settlement of such award in whole or in part occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the excess,
if any, of (A) the Fair Market Value on the vesting, exercise or settlement date
over (B) the exercise or base price, if any, of such award.
8.8 Change in Control.
(a) (1) Notwithstanding any provision in the Plan or any
Agreement, in the event of a Change in Control, the Board may, but
shall not be required to, make such adjustments to outstanding awards
hereunder as it deems appropriate, including, without limitation, (i)
causing all outstanding options and SARs to immediately become
exercisable in full, (ii) causing the Restriction Period applicable to
any outstanding Restricted Stock Award to lapse, (iii) causing the
Performance Period applicable to any outstanding Performance Award to
lapse, (iv) causing the Performance Measures applicable to any
outstanding Restricted Stock Award (if any) and to any outstanding
Performance Award to be deemed to be satisfied at the minimum, target
or maximum level, (v) causing
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the amount in a Deferred Compensation Account attributable to a Company
Match to vest, or (vi) electing that each outstanding award shall be
surrendered to the Company by the holder thereof, and that each such
award shall immediately be canceled by the Company, and that the holder
shall receive, within a specified period of time from the occurrence of
the Change in Control, a cash payment from the Company in an amount
equal to:
(A) in the case of an option, the number of shares of
Stock then subject to such option, multiplied by the
excess, if any, of the greater of (x) the highest per
share price offered to stockholders of the Company in
any transaction whereby the Change in Control takes
place or (y) the Fair Market Value of a share of
Stock on the date of occurrence of the Change in
Control, over the purchase price per share of Stock
subject to the option, and
(B) in the case of a Free-Standing SAR, the number of
shares of Stock then subject to such SAR, multiplied
by the excess, if any, of the greater of (x) the
highest per share price offered to stockholders of
the Company in any transaction whereby the Change in
Control takes place or (y) the Fair Market Value of a
share of Stock on the date of occurrence of the
Change in Control, over the base price of the SAR,
and
(C) in the case of a Restricted Stock Award, the number
of shares of Stock then subject to such award,
multiplied by the greater of (x) the highest per
share price offered to stockholders of the Company in
any transaction whereby the Change in Control takes
place or (y) the Fair Market Value of a share of
Stock on the date of occurrence of the Change in
Control, and
(D) in the case of a Performance Award, the amount
payable with respect to such Performance Award if the
applicable Performance Measures were satisfied at the
maximum level, and
(E) in the case of a Deferred Compensation Account, the
number of shares of Stock then deemed to be in the
Account, multiplied by the greater of (x) the highest
per share price offered to stockholders of the
Company in any transaction whereby the Change in
Control takes place or (y) the Fair Market Value of a
share of Stock on the date of occurrence of the
Change in Control.
(2) In the event of a Change in Control pursuant to Section
(b)(3) or (4) below in connection with which the holders of Stock
receive shares of common stock that are registered under Section 12 of
the Exchange Act, the Board may, but shall not be required to,
substitute for each share of Stock available under this Plan, whether
or not then subject to an outstanding award, the number and class of
shares into which each outstanding share of Stock shall be converted
pursuant to such Change in Control. In the event of any such
substitution, the purchase price per share in the case of an option
shall be appropriately adjusted by the Committee, such adjustments to
be made in the case of outstanding options without an increase in the
aggregate purchase price or base price.
(b) For purposes of the Plan, "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
25% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally on matters
(without regard to the election of directors) (the "Outstanding Voting
Securities"), excluding, however, the following: (i) any acquisition
directly from the Company or an Affiliate (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege, unless the security being so exercised, converted or
exchanged was acquired directly from the Company or an Affiliate), (ii)
any acquisition by the Company or an Affiliate, (iii) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate, (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this Section 7.8(b), or (v) any acquisition
by the following persons: (A) LeRoy T. Carlson or his spouse, (B) any
child of LeRoy T. Carlson or the spouse of any such child, (C) any
grandchild of LeRoy T. Carlson, including any child adopted by any
child of LeRoy T. Carlson, or the spouse of any such grandchild, (D)
the estate of any of the persons described in clauses (A)-(C), (E) any
trust or similar arrangement (including any acquisition on behalf of
such trust or similar arrangement by the trustees or similar persons)
provided that all of the current beneficiaries of such trust or similar
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arrangement are persons described in clauses (A)-(C) or their lineal
descendants, or (F) the voting trust which expires on June 30, 2009, or
any successor to such voting trust, including the trustees of such
voting trust on behalf of such voting trust, (all such persons,
collectively, the "Exempted Persons");
(2) individuals who, as of November 9, 1994, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided that any individual who
becomes a director of the Company subsequent to November 9, 1994, whose
election, or nomination for election by the Company's stockholders, was
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was
initially elected as a director of the Company as a result of an actual
or threatened election contest, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act, or any other
actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall not be deemed a member
of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Transaction"), excluding, however, a Corporate Transaction pursuant to
which (i) all or substantially all of the individuals or entities who
are the beneficial owners of the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 51% of the combined voting power of
the outstanding securities of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns, either directly or
indirectly, the Company or all or substantially all of the Company's
assets) which are entitled to vote generally on matters (without regard
to the election of directors), in substantially the same proportions
relative to each other as the shares of Outstanding Voting Securities
are owned immediately prior to such Corporate Transaction, (ii) no
Person (other than the following Persons: (v) the Company or an
Affiliate, (w) any employee benefit plan (or related trust) sponsored
or maintained by the Company or an Affiliate, (x) the corporation
resulting from such Corporate Transaction, (y) the Exempted Persons,
(z) and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Voting Securities) will beneficially own, directly or
indirectly, 25% or more of the combined voting power of the outstanding
securities of such corporation entitled to vote generally on matters
(without regard to the election of directors) and (iii) individuals who
were members of the Incumbent Board will constitute at least a majority
of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
8.9 No Right of Participation or Employment. No person shall have any
right to participate in the Plan. Neither the Plan nor any option granted
hereunder shall confer upon any person any right to continued employment by the
Company or any of its subsidiaries or affiliates or affect in any manner the
right of the Company or any of its subsidiaries or affiliates to terminate the
employment of any person at any time without liability hereunder.
8.10 Rights as Stockholder. No person shall have any right as a
stockholder of the Company with respect to any shares of Stock of the Company
which are subject to an award granted hereunder unless and until such person
becomes a stockholder of record with respect to such shares of Stock.
8.11 Governing Law. The Plan, each award granted hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
8.12 Severability. If a provision of the Plan shall be held illegal or
invalid, the illegality or invalidity shall not affect the remaining parts of
the Plan and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included in the Plan.
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